International Macroeconomic Statistics

Academic level: BSc
Credit values: 5ECTS

Hours in class: 32

Lecturer:Prof. Y.Ivanov

Pre Requisits: Macroeconomics ( basic provisions), International economics ( basic provisions), Theory of statistics ( mainly index numbers theory)

Major objectives and content of the course in broad terms.

The major objectives of the course are as follows : to acquaint students with activities of international organizations in the field of international statistics, their functions and responsibilities in this context; to introduce and discuss the provisions of main international standards on macroeconomic statistics which are set out in the handbooks and manuals produced by the international organizations on the topics relevant for the areas of their responsibilities. These standards contain recommendations on such topics as system of national accounts (SNA); input- output tables ; balance of payments and international investment position; government finance statistics; consumer price indices; international comparisons of gross domestic product and purchasing power parities. It is also intended to consider practical problems which arise in the course of implementation of the above mentioned international standards. The students will be acquainted with discussion of some conceptual issues of macroeconomic statistics in specialized literature.
Mastering materials on these topics by the students requires attending the lectures and participating in discussion of the relevant issues, solving the numerical exercise both in class and independently at home.

More specifically the content of the course is described below in the section dealing with the aims of the course and course schedule.

Aims of the course in more specific terms.

- Overview of the activities of international organizations in the field of international statistics, their functions and responsibilities in production of the international standards in statistics ,in dissemination of internationally comparable data, in analyzing and forecasting development of the world and regional economies as well as the economy of individual countries. These refer to activities of the UN Statistical Commission, organizations of the UN system such as International Monetary Fund (IMF), World Bank, UN Economic Commission for Europe (ECE), International labour Organization (ILO).Other international organizations involved in international statistics are Organization of Economic Cooperation and Development (OECD) and Eurostat (Statistical office of European Community) .
- Introduction and discussion of the underlying concepts, definitions and classifications of the SNA 2008 (approved by the UN Statistical Commission in 2009 ) which is considered as international standard in national accounting at present time. These refer to concept of economic production, income and wealth, primary distribution of income and redistribution, stocks of assets and liabilities. It also intended to consider under this heading the major accounts of the SNA, the entries in the accounts which reflect the economic transactions pertaining to various aspects of economic process. Finally it is intended to clarify the methods of computation of major SNA indicators such as gross domestic product (GDP), gross national income (GNI), national saving, national wealth and the interrelations among them.
- Introduction and discussion of the methodology of compilation of Balance of Payments (BP) described in the Manual on this topic released by the IMF in 2008 and considered as international standard in this field. Special attention will be paid to definition of definition of residency which is essential for proper recording transactions of residents of the given country with the rest of the world, to the structure of the BP and to various types of transactions recorded in current, capital and financial accounts as well as to the interrelations among them. It is also intended to consider under this heading the concept and definition of the system of indicators known as International Investment Position which is defined to include the stocks of financial claims of the given country to the rest of the world and to stocks of financial claims of the rest of the world to the given country.
- Introduction and discussion of the methodology of compilation of Government finance Statistics set out in the IMF Manual on this subject released in 2001(considered as international standard in this area) and in a number of the documents on this topic released by the IMF during the recent years. This methodology includes definition of general government sector and public sector as a whole, conceptual framework designed to secure consistent recording revenue and expenses of general government sector, acquisition of non-financial assets and transactions with financial assets and liabilities. It is also intended to consider some classifications of revenue and outlays of general government sector which are essential for computations of some variables and economic analysis.

- Introduction and discussion of principal provisions of the Manual on compilation of consumer price indices (CPIs) released by the ILO in 2004.This implies consideration of definition of consumer basket, provisions of the axiomatic and economic theories of index numbers which are essential in the context of computation of CPI, the formulas of CPI recommended in the above Manual. The concept of so called ”pure” CPI will be clarified.

Assessment methods. Written assignment for independent work at home and final written exam. Written assignment for independent work at home consists of preparation of essay on critical review of the report of Ctiglitz Commision on measuring economic development and social progress and solving numerical exercise on national accounts. Final written exam will consist of one theoretical issue and solving numerical exercise on national accounts.

Grading

Attendance and participation in discussions 10 %

Home assignments 30%
Final exam 60 %
Final grade structure:< 80 % - 5; < 60 % - 4; <40 -3:> 40 -2

Course schedule

Class 1. Activities of international organizations in production of international standards in macroeconomic statistics and in dissemination of international comparable data.
Class 2. SNA is a central bloc of macroeconomic statistics. SNA is an instrument of coordination of the re macroeconomic statistics. It was developed by integrating various chapters of macroeconomic statistics into coherent system of national accounts by harmonizing relevant definitions and classifications. Brief overview of the history of development of the SNA and international standards in these fields.
Class 3. Underlying concepts, definitions and classifications: concepts of economic production, income and wealth. Treatment in SNA illegal, underground and informal activities . Classification of economic units be institutional sectors and by industries
Class 4. Major accounts of the SNA and the entries made in them to record economic transactions in goods and services, incomes and financial instruments
Class 5. Major aggregates of the SNA such as gross domestic product, gross national income, gross national disposable income, national wealth and methods of computation them, including treatment of taxes and subsidies, types of prices used for valuation of relevant flows and stocks.
Class 6.Seminar on topics of the SNA. Tests and numerical exercises. Discussion of conceptual and practical problems of compilation of national accounts. Types of economic analysis of national accounts data. Limitations and constrains of the indicators of the SNA. Business accounts and national accounts.
Class 7 .Input –output table is important component of macroeconomic statistics. Role of V.Leontiev in developing this model of economic analysis and forecasting. The scheme of input-output table and relationship between its major sections and indicators. Mathematical equations which reflect relationship between the major variables of input- output table and make it possible to use it for forecasting and planning.
Class 8. Concepts , definitions and classifications of Balance of payments and international investment position. General structure of BP and various types of transactions recorded in the relevant accounts of BP. Balancing items of relevant accounts of BP and interrelations between them. Links between BP and SNA, between BP and international investment position. Concepts and classifications of foreign investments. Mistakes and omissions.
Class 9. Concepts , definitions and classifications of government finance statistics, definition of central government sector and public sector and distinction between them. Conceptual framework for recording revenue, outlays and transactions with financial assets and liabilities. A distinction between current and capital flows. Recording transactions on accrual an cash basis.
Class 10. Seminar. Discussion of solution of the exercises on national accounts
Class 11. Concepts , definitions and classifications of CPI statistics. Consumer basket and methods of its compilation. Overview of economic and axiomatic theories of index numbers. Tests of axiomatic theory applicable to computation of the CPI. Methodology of calculation of the CPI. Laspeyrus, Paashe and Fisher formulas of indices, Gershencron effect. Concept of” pure” CPI and of discrimination of prices. Major types of uses of CPT
Class 12. Seminar. Exercises and tests on compilation of CPI
Class 13 .Methodology of international comparison of gross domestic product with the help of purchasing power parities. Brief overview of international comparisons of GDP carried sts comparisons.Concept of purchasing power parity and its distinction from exchange rates
Class 14. Elaboration of methodology of international comparisons of gross domestic product. Classification of GDP by basic headings. Commodities – representatives selected for basic headings. The requirements of representativity and comparability of commodities- represtntnives. Methods of bilateral and multilateral comparisons of GDP. Index –numbers formulas used for computation of purchasing power parities : Fisher formula and ECS formulas used to compute purchasing power parities .Global comparisons are the result of special aggregating results of regional comparisons.
Class 15 Consultation before the exam.
Class 16 Written exam.

Reading

SNA 2008. United Nations publication, 2009< Web site of United Nations Statistical Division
SNA 1993, United Nations publication, 1994,Web site of United Nations Statistical Division
Balance of Payment and International investment Position. 2008, Web-site of the IMF
Government Finance Statistics, 2001, Web-site of the IMF
Non-Observed Econome in national accounts, Survey of country practices, United Nations, New York and Geneva, 2008
Measuring the Non-Observed Economy,A handbook,OECD,2002
Kravis I.B., Kenessy Z., Heston A., Summers R, A System of International Comparison of Gross Product and Purchasing Power- Baltimore 1975
ICP 2003 – 2006 Handbook – World Bank,2005
Balance of Payments and International Investment Position. Manual, 6-th edition, IMF
Rodney Edvinsson and Chris de Neuborg, A Consumer Price Index for Sweden, The review of income and wealth, Journal of International Association for Research in Income and Wealth, number 2, June 2011
Consumer Price Index, Manual,ILO,2004
The impact of globalization on national accounts, United Nations Economic Commission for Europe, Eurostat, Organization for Economic Development , New York and Geneva, 2011
The New System of National Accounts. Kluver Academic Publishers, Kluwer/Dordrecht/London,1996`

Paul Studesky, The Income of Nations, Wasington Square, NEW YORK UNIVERCITY PRESS,1961

Practical Guide to producing consumer price indices, United Nations,2009,United Nations Economic Commission for Europe and ILO,IMF, OECD, Eurostat, THEWorld Bank.
Purchasing power parities and real expenditures,@005 benchmarking year, OECD, Eurostat, European commission, 2007
EU in the world, A statistical portrait, 2010 edition, Eurostat

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