Re: [OPE-L] misusing national accounts data

From: Francisco Paulo Cipolla (cipolla@UFPR.BR)
Date: Fri Nov 18 2005 - 19:22:20 EST

It would be interesting to know over which period is the stagnation of fixed
investment referred to. In terms of the schemes of reproduction the sub-sector
of machines (for instance) would be playing the role of allowing simple
reproduction to procede whereas expansion/contraction of circulating capital
occurs within a less than full utilization of the given productive capacity. A
sort of defective simple reproduction, simple reproduction on average below
simple reproduction. Strange.

glevy@PRATT.EDU wrote:

> I sent Jurriaan a copy of a working paper by Jochen Hartwig,
> "On misusing national accounts data for Governance Purposes"
> < >.
> Many of you should be interested in that paper -- after all,
> many here teach national income accounting as part of macro
> courses and/or use those accounts for empirical research purposes.
> Jurriann replied as follows (forwarded with his permission).
> In solidarity, Jerry
> ----- Original Message -----
> From: Jurriaan Bendien
> Sent: Wednesday, November 16, 2005 11:39 AM
> Subject: Re: misusing national accounts data
> No I haven't seen it, though in my field of interest. Thank you for making
> me aware of it. My criticism of national accounts is not so much that they
> are pure nonsense, but rather that it takes quite a bit of reaggregation
> to make sense out of them. At present, for example, in the Netherlands
> real GDP growth is practically zero (well, 0.3% or something like that).
> If you were to regard GDP as a measure of national income, you would
> conclude that it is static. But in fact, much net property income is not
> included in GDP, and in particular capital gains, rents and a portion of
> net interest receipts. The reason is the specific definition of income
> regarded to be related to production. So in reality, the national income
> is increasing more than real GDP growth, the late Seymour Melman called it
> "profits without production". This becomes visible only when you look at
> income & outlay accounts, BOP data, tax data and the capital accounts
> data. In many countries, capital gains are not taxed, or taxed only
> selectively, and for that reason, no reliable data exists on capital gains
> - realised from sales, or present as asset appreciation. Whereas FDI data
> present a picture of foreign assets held, typically data on the value of
> domestic assets is rather fragmentary. Consequently it's often difficult
> to say what the magnitudes are. At a guess, about a quarter of realised
> incomes in advanced capitalist countries these days represent income from
> property transactions of one kind or another. This masks the fall in
> Marxian output values. The most telling feature of "profits without
> production" is the overall stagnation of fixed investment, and if you look
> at disaggregated fixed investment data, you realise that a lot of it
> consists of computers and furniture, furnishings etc. rather than real
> plant & equipment that would increase productive capacity. Not altogether
> surprising if average real capacity utilisation is at 70-80%.

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