Some implications of the crises for
indicators on non-financial
corporations and households
Paul Schreyer
OECD Statistics Directorate
1
Contents
•
•
Features of the crises and a framework for
monitoring
Statistical implications in specific domains
•
Balance sheets, asset prices and sector
accounts
•
Distributional contents
2
Features of the crises and a framework for
monitoring
•
•
•
•
Focal point of the crisis has been the financial
sector, in particular the “shadow” banking sector
The crisis also reflected the existence of an overstretched household sector, which had
accumulated high amounts of debt, especially
mortgages. Much of this debt build-up was based
on expectations of ever-increasing housing prices.
All sectors are affected by the crises and there are
financial, real economy, social and long-term
sustainability effects
This can be brought together in a framework
3
Framework: crises area and sectors
Crisis area
Financial
effects
Economic
effects
Institutional sector
Financial
corporations
Non-financial
corporations
Households
Losses on assets,
liquidity risks,
solvency risks lower
securitization, lower
credit rating
Losses in financial
wealth (pensions
and savings), losses
in non-residential
property, lower
credit rating, credit
crunch
Losses in financial
wealth (pensions and
savings), losses in
residential property
(real estate), credit
crunch
Higher transfers to
financial
institutions, higher
public debt, higher
stakes in financial
firms, easier
monetary policies
Income losses,
lower demand and
profits, currency
runs and related
losses
Income losses,
lower demand and
profits, lower
investment, higher
inventories, lower
foreign trade,
currency runs and
asset losses
Job losses, income
losses, lower
confidence, lower
consumption, lower
remittances, currency
runs and asset losses
Higher public
expenditure for
bailouts, support to
non-financial
institutions and
households,
currency runs and
related losses
Increase in
bankruptcies, lower
innovation and
investment, lower
entrepreneurship
Higher poverty, loss
of firm specific
human capital, ,
higher vulnerability
Higher social
transfers
Losses in economic
and financial
capital, lower trust
and confidence,
loss of firm-specific
human capital,
greater strains in
capital/labour
relations
Lower spending in
education, lower
tolerance and trust,
greater social
dysfunctions, lower
attention to
environmental
threats, lower
charitable donations
Higher public debt
and bond yields,
claims to reconsider
mix in pension
portfolios, strains
on public pensions,
lower infrastructure
investment, less
attention to
environmental
threats, lower
4
foreign aid
Social effects
Sustainability
(long-term)
effects
Losses in economic
and financial
capital, lower trust
and confidence,
lower attention to
environmental
threats and
green/social
investment
Government
Features of the crises and a framework for
monitoring
•
•
Monitoring the way out of the crises requires
keeping an eye on all these sectors and components,
not only on the financial sector and/or financial
asptects of other sectors
The following statistical areas would seem of
particular importance for this purpose
5
Statistical implications (1): Sector accounts, balance
sheets and asset prices
•
•
•
•
•
Potentially large differences in sectoral effects
Desirable: quarterly sector accounts
Quarterly data on financial and non-financial
accounts by sector are still missing or patchy for
many countries
Many OECD countries have annual data by sector,
but even there, the sequence of accounts is often
incomplete
 develop sectoral quarterly data with a pragmatic
level of detail but as good a coverage of the whole
sequence of accounts as possible
6
Statistical implications (1): Sector accounts, balance
sheets and asset prices
•
•
•
Example: work by Eurostat/ECB
Quarterly sector accounts
•
quite timely (as of early July 09, Q4 08 data are
available)
•
integrated financial and non-financial data on
stocks and flows
•
presentation in tables and with a set of graphs
•
for zones only
Example of indicator
7
Statistical implications (1): Balance sheets, asset prices
and sector accounts
Chart S1M-4
Growth of gross fixed capital formation and nominal gross disposable income
of households1) and the investment rate2)
1)
annual percentage change - 2) percentage of gross disposable income (adjusted for D8 net)
gross disposable income: euro area (left scale)
gross fixed capital formation: euro area (left scale)
investment rate: euro area (right scale)
investment rate: EU (right scale)
12
9
11
6
10
3
9
0
8
-3
7
-6
6
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
12
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
8
Statistical implications (1): Balance sheets
Data availability:
•
•
•
•
•
•
•
Annual data: reasonable coverage of sectoral
balance sheets
Part of the Eurostat/OECD transmission
programme
Differences in asset coverage and sector
coverage
Most widely covered asset type: dwellings
Visible progress in the recent past
Quarterly data: very scarce
9
Time
coverage
Assets
available
Sectors
Country
89-05
All
5
Belgium
70-06
Dwellings and selected other
2
Canada
70-07
all
5
Czech Republic
95-06
all
5
Denmark
90-05
Dwellings and selected other
5
Finland
75-06
Dwellings only
4
France
78-07
all
5
Germany
95-07
05-06
00-06
Dwellings and selected other
5
5
5
00-06
Dwellings and selected other
5
80-03
96-05
'05-06
96-05
Dwellings and selected other
5
95-06
Dwellings and selected other
5
95-07
Dwellings and selected other
5
Norway
78-06
Produced assets (total)
Poland
95-05
Dwellings only
5
99
Dwellings and selected other
5
95-06
Dwellings only
5
Australia
Austria
Greece
Hungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Portugal
Slovak Republic
Spain
Sweden
95-05
Dwellings only
5
Switzerland
89-05
Dwellings and selected other
1
70-06
Dwellings and selected other
5
Turkey
10
United Kingdom
United States
T2600
T2000
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
1 15 11
Net Fixed Asset
Net Fixed Asset
Current
replacement cost
All industries
Constant
replacement cost
All industries
Current
replacement cost
All industries
Constant
replacement cost
All industries
1959-2007
1976-2007
1995-2007
1995-2006
1995-2006
1978-2007
1991-2007
2000-2007
2000-2007
1996-2007
2000-2007
2000-2006
1999-2002, 2005
-
1959-2007
1976-2007
2000-2007
1995-2006
1995-2006
1978-2007
1991-2007
2000-2007
2000-2007
1959-2007
1976-2007
1995-2007
1970-2007
1995-2006
1995-2006
1978-2007
1991-2007
2000-2007
2000-2007
2006-2007
1995-2006
1995-2007
1970-2008
1995-2006
1999-2002, 2005
2000-2006
1970-2007
1959-2007
1976-2007
2000-2007
1995-2006
1995-2006
1978-2007
1991-2007
2000-2007
2000-2007
2000-2007
2000-2006
2004-2007
-
2000-2007
1970-2008
2000-2006
2004-2007
2000-2006
1970-2007
Assets
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Total
T1400
Gross Fixed Asset Gross Fixed Asset
Capital Stock
Availability
industries
Sources
17
60
31
60
60
1
17
10
8
6
6
10
9
10
7
60
8
31
1
10
8
6
60
8
31
17
1
60
8
8
5
10
60
8
11
31
9
Statistical implications (1): Sector accounts, balance
sheets and asset prices
•
•
•
•
However, data comparability largely unknown
In particular, statistical bases for dwellings stocks
are likely to vary considerably between countries
Well-known problems: measurement of
depreciation and maintenance
Needed:
•
reliable physical measures of stocks of dwellings,
including their characteristics
•
Prices that reflect characteristics in space and
over time  link to CPI and consumption
12
Statistical implications (2): Household income and
its distribution
•
•
•
•
•
Average measures less meaningful than in the past
Need to be complemented by measures with
distributional content
Monitoring trends in poverty and income inequality
is an important element for policy makers to guide
action exiting the crises
Equally important for the assessment of living
standards: distribution of household wealth and
household consumption
Requires matching of micro- and macro-economic
data
13
Example: household income and its distribution:
INSEE study that breaks HH accounts down by
type of household
Savings ratio increases with disposable income
50%
40%
36%
34%
30%
20%
10%
1%
3%
6%
7% 6%
10% 9%
0%
-10%
-11%
-20%
Q1
Source: INSEE (2009)
Q2
Q3
Q4
Q5
14
Conclusions
1. There are considerable gaps in quarterly sectoral
data. Special efforts should be devoted to developing
quarterly accounts for main sectors
2. Sectoral balance sheet data is increasingly
becoming available at least in OECD countries. Most
data is annually, however.
3. A key ingredient for good information about
household wealth is data on the stocks of dwellings
and the associated price levels and their changes over
time. Data exists, but the degree of its international
comparability is unknown.
15
Conclusions
3. Average measures of income and wealth need to be
complemented by distributional information. This
requires linking national accounts concepts with
micro-economic concepts of income and wealth and
merging macro- and micro-data sets.
16
Thank you!
17