Workshop Inter-industry Accounts

1
Workshop Inter-industry Accounts

• Workshop WP 1, 15-16 September 2005, Groningen
• This project is funded by the European
  Commission, Research Directorate General as part
  of the 6th Framework Programme, Priority 8,
  "Policy Support and Anticipating Scientific and
  Technological Needs".

2
Why this workshop?

• EUKLEMS meeting Helsinki, June 2005
• Aim of WP 1 internationally comparable set of
  current and constant price SUT for Europe
  (Eurostat, OECD).
• Aim of this workshop Country reports,
  presentations, bilateral contacts
• Restricted preliminary database ready January
  2006. Data in by mid-November this year.
• Fit with plans NSO (but perhaps faster, longer,
  more elaborate)
• Need for flexibility and creativity
• Need to agree on (mechnical) short-cuts to be
  taken
• Each countrys situation is different.

3
Set up

• Set-up of program, esp. Friday
• Contact persons
• Pirkko Aulin-Ahmavaara Finland, Sweden, Spain
• Joerg Beutel Germany, Belgium, Austria
• Mun Ho France, UK, Italy
• Marcel Timmer Eastern Europe, Netherlands,
  Denmark, rest
• Introduction

4
MFP growth

• Need value shares and volume growth rates of
  gross output, intermediate inputs (EMS), labour
  (L) and capital services (K) at industry level

5
SUTs

• Collect data in consistent framework Supply and
  Use tables (SUT).
• Consistency between input and output, and various
  prices
• Data useful for wider applications (tax reforms,
  role of trade and transport, macro-economic
  modelling, energy, IO-analysis etc.)
• Why SUT and not Input-output tables?
• IO are derived from SUT
• SUT available from 1995 onwards
• Easier to deflate and balance

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Classifications

• EUK industry list
• Starting point A60 of Eurostat
• Additional breakdown for
• High tech sectors
• Future revisions
• Imputed rent
• EUK product list is equal to industry list, but
  detail is less important than for industry!

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Required Supply and Use tables

• 1.      USE table for domestic output at basic
  prices
• 2.      USE table for imports at basic (c.i.f.)
  prices
• 3.      SUPPLY table at basic prices
• 4.      VALUATION matrices (on domestic and on
  imports)
• a.      Use-side trade margin table (retail and
  wholesale)
• b.      Use-side transport margin table
• c.      Use-side non-deductible VAT on
  commodities
• d.      Use-side other taxes net of subsidies on
  commodities

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SET UP
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Availability of SUTs

• A. Long series of constant SUT Denmark,
  Finland, Netherlands and France.  
• B. Short series of constant price SUT for 1990s
  and IO tables for earlier years Germany,
  Luxembourg, Sweden
• C. Long-term series of current price SUT and IO
  and reasonable deflators Italy, Austria, UK,
  Spain
• D. without reasonable (service) deflators
  Belgium , Ireland
• E. Countries with no SUT or IO before 1995
  Eastern European countries, Greece, Portugal
• NB Countries are all going through revisions in
  this year (including FISIM and annual chained
  Laspeyres, hedonics, etc.)

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Steps

• National Accounts data on gross output and value
  added at current and constant prices
• Post 2005 revision (1995 onwards or earlier) EUK
  72
• Pre 2005 revision (from 1970 to 1995 or earlier)
  
• EUK 72? (What about WP 2/WP3?) Need to solve
  industry classification breaks (e.g. Germany)?
• ESA 95 compatible
• Old series useful, if only for deflators?
• Current and constant price SUTs post 2005
  revision EUK 72
• Current price SUT pre 2005 revision, or
  IO-tables EUK 72?
• Derive consistent series of current price SUT and
  deflate

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Derivation of time series of current price SUTs
(1)

• Our default option is to generate long-term
  series of ESA 95 NA compatible SUTs with FISIM
  distributed
• Steps to be taken
• 1. Start with benchmark tables and latest NA
  output and value added series.
• 2. Make SUT ESA95 compatible
• - software (move from intermediate to
  investment, add in own account software),
  transport services, government depreciation
  reallocation
• - industrial classification NACE 1 (EUK)
• - FISIM (e.g Spain)
• - taxes on products and production
• - other
• 3. Interpolation techniques for non-benchmark
  years (presentations by Mun Ho, Kurt Kratena)

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Current price SUTs (2)

• Estimation of valuation matrices Often only
  total margins, total net tax etc. Blow up to
  total matrix (presentation Antti Pasanen)
• IO-tables can be transformed into SUT
  (presentation Jörg Beutel)
• Industry breakdowns
• Industry classification and level of detail does
  not need to be constant across countries and/or
  over time
• Keep as much detail as possible!
• Trade-off in detail and resources
• More important than product breakdown
• Simple short cut gross output from census.
  Assume same input structure
•  

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Current price SUTs (3)

• For projection and retrojection
• Eurostat method (presentation Jörg Beutel) based
  on value added and final demand totals from
  National Accounts
• Kratena (2005)
• Alternative make series of ESA79/NACE0 and link
  to ESA95 series

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Constant price SUTs

• Basics
• Default use chained Paasche price indices and
  Laspeyres volume indices
• Deflate at lowest level possible
• Deflate intermediate use at basic price
• Need to deflate margins and net taxes as well
• Assumption 1 Basic prices are identical in all
  uses.
• Assumption 2 industry outputs at both current
  and constant prices have to be equal to National
  Accounts values
• Starting point (implicit) gross output deflator
  (basic price) from NA
• All products from industry j have same basic
  price, so basic price of product i differs by
  producing industry
• Calculate domestic basic price of i using Supply
  table
• Deflate row in Use Table with this basic price
• Hence SUT rows are balanced

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Way forward

• SUT framework is overarching framework
• Keep details where possible
• Need for short cuts
• Intrapolation, valuation matrices, IO to SUT,
  deflation
• Important to document basic data sources and
  methodologies used (share experiences!)
• Bilateral consultation with other members
• Data delivery Mid-November, final May 2006.
• What is important? What can most easily be done?
  When are revisions expected? Make planning
• Special issue Economic System Research

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Road ahead

• Priorities, mid-November
• 1. National accounts series on gross output,
  value added, intermediate inputs in current and
  deflators (or volume measures), revision 2005,
  EUK 72, 1970-2003/4
• Break in industrial classification (share bridge
  tables)
• Lack of industry detail
• Change in ESA79/95
• 2. Time series of current price SUT, revision
  2005, EUK 72, 1995 (or earlier!)-2002
• Supply table at basic prices with trade and
  tax/sub columns
• Use table at purchasers prices
• Valuation matrices where possible (benchmark?
  Short cuts Antti)
• Breakdown import/domestic where possible
  (benchmark?)
• Interpolation for missing years (default method
  RAS, be careful with margins)
• Industry detail, product detail less important
• Match with NA series

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Road ahead

• 3.Time series of constant price SUT, revision
  2005, EUK 72, 1995 (or earlier!)-2002
• If needed, short cut deflation method
  (Groningen?)
• 4. Time series of current price SUT,
  pre-revision, EUK?, 19xx-1995
• From IO to SUT (Joerg), followed by interpolation
  (Mun)
• Backcasting (Kurt) get time-series of final
  demand (bridge matrices), add in any information
  you have on II.
• Backcasting with minimum of data (EURO method)
• Experimentation!
• 5. Time series of constant price SUT,
  pre-revision, EUK?, 19xx-1995

18
Way forward

• Keep details where possible
• Important to document basic data sources and
  methodologies used (share experiences!)
• Bilateral consultation with other members
• Data delivery Mid-November, final May 2006.
• What is important? What can most easily be done?
  When are revisions expected? Make planning
• Write-up (Marcel), bilateral feedback on country
  reports
• Special issue Economic System Research
• IO-conference in Sendai, July 2006