Background of National Income Accounting

What does GDP Measure?

How is it Constructed?

Economic Census Data

Background of National Income Accounting
Historical Development
Great Depression of 1930s
Policy Decisions based on Sketchy Data
Stock Price Indices, Freight Car Loading, Indices of Industrial Production
Simon Kuznets and Richard Stone (1930s)
Tax data, payroll data, economic census (1929)
Industry-by-industry
The World War II
Industry-wise to product-wise
Background of National Income Accounting

Tax data on gross sales of businesses

Final sales
Indirect estimates of expenditure
Evolution to C, I, G, X, M
Expenditure approach: the amount of spending by purchasers
Background of National Income Accounting
Leontiefs Input-Output tables (1950s)

Product approach: the amount of output produced

National Income Accounting
National income accounts: an accounting framework used in
measuring current economic activity
Three alternative approaches give the same measurements
Product approach: the amount of output produced
Income approach: the incomes generated by production
Expenditure approach: the amount of spending by purchasers