Territorial Adjustments in Government Transactions - PowerPoint PPT Presentation

1 / 19
About This Presentation
Title:

Territorial Adjustments in Government Transactions

Description:

Territorial Adjustments in Government Transactions BEA Government Statistics Users Conference, Sep. 14, 2006 Benyam Tsehaye Economist, Federal Branch – PowerPoint PPT presentation

Number of Views:88
Avg rating:3.0/5.0
Slides: 20
Provided by: CindyV
Category:

less

Transcript and Presenter's Notes

Title: Territorial Adjustments in Government Transactions


1
Territorial Adjustments in Government Transactions
  • BEA Government Statistics Users Conference, Sep.
    14, 2006

Benyam Tsehaye Economist, Federal Branch
2
Topics To Be Covered
  • Territorial adjustments
  • Aggregate economic measures
  • Definition of the United States
  • The conceptual problem
  • Proposed treatment
  • Project status and implementation

3
Territorial Adjustments
  • One type of adjustment made to source data in
    preparing NIPA measures is known as the
    territorial or geographic adjustment
  • Transactions between the economic agents in the
    U.S and the territories

4
Territorial Adjustments
  • Territories refer to
  • -The U.S. Territories
  • U. S. Virgin Islands
  • Guam
  • American Samoa
  • -The Commonwealth of Puerto Rico
  • -The Commonwealth of Northern Mariana
    Islands

5
Territorial Adjustments
  • This presentation is primarily about transactions
    between the U.S. Government and the territories.
  • Social insurance programs
  • Federal grant programs

6
Aggregate Economic Measures
  • National Income Product Accounts (NIPAs)
  • -integrated set of economic accounts
  • -show the composition of production and
  • distribution of income earned in
  • production
  • - Examples Gross Domestic Product (GDP),
    Gross Domestic Income (GDI), Personal Income and
    Personal Saving

7
Aggregate Economic Measures
  • GDP vs. GNP
  • GDP is the featured measure of production in
    the U.S.
  • -production by labor and property located in
    the U.S.
  • -consistency with other key economic indicators
    -international comparability
  • GNP measures production by labor and property
    supplied by U.S. residents in or outside the
    U.S.
  • Definition of the United States is needed

8
Definition of the United States
  • Source data used may employ different definitions
  • International Transaction Accounts (ITAs) and
    NIPAs.

9
Definition of the United States
  • International Transaction Accounts (ITAs) vs.
    NIPAs
  • -ITAs emphasize customs and therefore view the
    U.S. territories as part of the U.S.
  • -NIPAs, most source data traditionally cover the
    50 States and the District, and view the U.S.
    territories as part of the rest of world
  • Coverage of the U.S. territories is not consistent

10
Conceptual Problem
  • In a system of integrated accounts,
  • -sectors
  • -double-entry accounting
  • It is imperative that boundaries, flows and their
    measurement be defined consistently in order to
    make the measures that are generated meaningful.
  • Hence a single definition of the economic
    boundary of the United States ought to be used.

11
Conceptual Problem
  • There are pros and cons to either definitions
    (ITA vs. NIPA)
  • However adjusting either definition would be a
    major project
  • Instead, this presentation deals with a narrower
    issue of consistently estimating NIPAs within
    current geographical scope

12
Conceptual problem
  • Social benefits received by residents of the
    territories ought to be excluded from NIPA
    personal income
  • One of the coverage adjustments used to achieve
    that is to exclude transactions with the
    territories from Federal source data
  • This leads to a slightly misleading picture of
    Federal government transactions and fiscal
    balances

13
Conceptual Problem
  • Social Security paid 493.1 billion to
    beneficiaries in 2004 (source Social Security
    Administration)
  • U.S. territories, 5.2 billion
  • Foreign, 2.7 billion
  • Domestic, 485.2 billion
  • In the NIPAs,
  • -Gov. social benefits to persons (485.2)
  • -Government social benefits to the rest of the
    world (2.7)
  • Payments to the territories (5.2) are not
    counted

14
Proposed Treatment
  • Recognize these transactions as flows between the
    U.S. Government and rest-of-the-world in the 2008
    Comprehensive Revision of the NIPAs.
  • The territories will continue to be part of the
    Rest-of-the-World sector from the NIPA point of
    view.
  • The transactions between residents of the
    territories and the Federal Government will be
    recognized as Federal receipts and expenditures.

15
Proposed Treatment
  • Treatment will be in line with the current
    treatment of transactions between the private
    sector of the U.S. economy and the territories.

16
Progress Report
  • The research team
  • - Identified the main NIPA series and tables
    affected
  • by implementation of the proposal
  • -Identified sources to allocate territorial
  • adjustments to transaction typesgrants,
    social
  • benefits, etc.
  • -Will concentrate on refining historical data
    and examining implications to NIPA tables and
    series

17
Effect of Proposal
  • If the proposal is implemented as presented
    today
  • NIPA table 3.2 (Federal Receipts and
    Expenditures) would be affected, mainly those
    series related to Social Insurance Programs

18
Effect of Proposal
19
Plan and Contact Information
  • The research team plans to incorporate the change
    in the upcoming comprehensive revision(2008) of
    the NIPAs.
  • Please forward comments and questions to
  • Benyam Tsehaye
  • Tel. 202-606-9791
  • e-mail benyam.tsehaye_at_bea.gov
Write a Comment
User Comments (0)
About PowerShow.com