ALBERT

Notes: The formidable expansion in the scope of the United Nations International Comparison Project has brought into evidence limitations of the methodology used in the first three phases. The author considers that there are two indispensable conditions needed to give renewed impetus to the ICP: (a) the objectives must be redefined, and (b) the methodology must be built on an entirely new basis. He considers the broad lines of such an evolution to be the following.(a) The objective of volume comparison must be kept distinct from that of purchasing power comparison, given that both the basic material and the formulae to be used at the aggregate level differ in the two cases.(b) At the basic heading level, it is proposed, for both volume and purchasing power comparisons, to replace the multilateral approach by a “minimum scale” binary and unilateral approach, and to use the EKS method. This will make possible an improvement in the accuracy of the estimates, a reduction in the overall costs, and a drastic reduction in execution time. What is more, it would be possible to regionalize the worldwide comparison, in the sense that the results of the basic heading comparisons already obtained at the regional level for regional purposes can be used as an input in the framework of the worldwide comparison. At the aggregate level, in the framework of volume comparison, it is proposed that a constant price procedure in the spatial sense should continue to be used. It is, however, proposed that the prices of the set of countries (GK) be replaced by a structure of common “equi-distant” prices (G). This would permit the elimination of the significant systematic distortions observed in the comparison between rich and poor countries in the first three phases of ICP. What is more, this gives maximum stability to results obtained for the same countries at different geographical levels. By using a set of common “equi-distant” quantities, the same advantage can be obtained in the purchasing power comparison.

Notes: A number of rather traditional problems relating to the estimation of the national accounts have been raised in the recent literature. This paper examines five of these problems from the point of view of a government statistician working within certain time and resource constraints. Credibility, comprehensibility, theoretical validity, cost and analytical usefulness are the criteria which should aid in deciding how to treat such matters as the extension of the boundaries of economic production, proposed changes in the categorization of both final and intermediate expenses, the treatment of “total” welfare and estimation relating to the so-called underground economy.

Notes: Book review in this article:JAMES MEADE: Stagflation Vol 1: Wage Fixing. George Allen & Unwin LA.

Notes: The growth of the public sector in the post-war period and the consequences of this development for economic growth is a strongly disputed subject of economic theory and policy. In this paper the development trends of state activities in the case of the Federal Republic of Germany are presented. The structure of public expenditures as well as the tax structure are taken into consideration and possible impacts on real economic growth are analysed. The negative correlations between some kinds of public expenditures (or taxes) and the growth rate of real GNP should not be taken in proof of the growth-retarding effects which might ensue from increasing state activities. It seems to be more likely that state activities have induced shifts of resources from the formal into the informal economy. Politicians should be aware that some measures of economic policy conventionally proposed will strengthen the movement into the informal economy, thus intensifying the current problems within the public budgets as well as in the social security system.

Notes: This paper uses five valuation methods to derive aggregate and per person estimates of the value of household work in the United States. Two general questions are posed: (1) what is the relationship between the aggregate estimates and the valuation method used, and (2) how do per person estimates vary by sex and earnings?The main observations of the paper are as follows: First, the aggregate value of household work is sizable regardless of the valuation method used. Second, aggregate estimates are extremely sensitive to the method of valuation. For example, the highest estimate is $475 billion greater than the lowest estimate. Third, contrary to earlier findings, opportunity cost valuation methods generally produce significantly higher estimates than market cost valuation methods. Fourth, per person estimates vary significantly by sex and level of earnings across valuation methods. Generally, market cost estimates.

Notes: Income generating functions are statistical tools used to explain income inequality and other economic outcomes and behavior. These functions are often associated with a strict human capital framework, but they need not be. Instead, they may be viewed as a reduced form equation summarizing the relationship between income and various personal and locational characteristics. Following this latter interpretation, we develop the regression and analysis of variance approaches to income generating functions and estimate them empirically using micro-economic data from one low income country, Colombia. Proceeding to increasingly parsimonious specifications of income generating functions, insights are gained into the structure of incomes in Colombia.

Notes: In this paper a definition of poverty in terms of welfare is given. A method is developed to derive poverty lines from an individual welfare function of income. The model is extended to analyse the effect of several socio-economic characteristics on the level of the poverty line. An empirical application of the method is given based on data from a survey in eight European countries in 1979. Differences in the poverty lines both between countries and between socio-economic groups within each country are considered. Finally the number of people below these poverty lines is estimated for all countries in the group.

Notes: The Kingdom of Nepal is one of the least developed and least known countries. In order to understand the sometimes non-conventional estimating procedure used, a background section is included, describing the physical, socio-economic and institutional framework. In the second part of the paper some illustrative examples of the approaches used are given, the full description being published in four volumes, National Accounts of Nepal, National Planning Commission, Kathmandu. The last part of the paper considers the usefulness of national accounts based upon the market economy, and in general, the problem of applicability of international concepts to a developing country. What is the significance of international concepts to a developing country? What is the significance of national value aggregates in a country in which the unit of national currency does not serve as a nation-wide standard of value? Can a common denominator be found if the scale of values and the whole outlook of different groups are so different? What do people value, and does the rural population in localized economies put a monetary price on the value? Has the concept of labour force or employment, as used in industrial societies, any meaning in a society where all those capable, including small children, of contributing to daily survival do so? The conceptual problems have not yet been solved. National accounts are a useful first step in providing planners with symbols for telling a complex story in simple terms and as a kind of statistical reconnaissance, but as development planning is moving more and more in the direction of planning from below and into regional and rural development projects, household surveys are becoming essential planning and evaluation tools. Based upon twenty-five years of field experience, the author reflects upon problems and possible solutions, discussing managerial, training, substantive and statistical aspects.

Notes: This paper describes the composition of the public sector in the United Kingdom and traces the development and contribution to the economy of the three main sub-sectors-central government, local government and public corporations—over the past thirty years. Relevant data for output, employment, fixed capital formation and national wealth set the public sector into perspective with the economy as a whole and illustrate how its share of human and other resources has changed over the years. While all four measures show the public sector share of the total to have been around 30 percent in 1980, historically the changes have moved very differently. The slow, but fairly steady, increase in the share of employment and output contrasts with very marked changes in the other two measures. Although public sector fixed investment nearly doubled in real terms between 1950 and 1980 its share of total investment declined from 48 to 31 percent, a much smaller share being taken by dwellings, electricity supply and the railways. In terms of the share of national wealth the public sector moved from a state of indebtedness to the rest of the economy in the fifties and sixties to a position of holding nearly one third of the value of tangible and financial assets in the late seventies.A small part of the paper considers the international dimension, but because few other countries use the concept of a public sector, this section examines only the relationship between total tax revenue and GDP in a number of countries and employment in general government.The problems of determining the boundary of the public and private sectors occurs most frequently at the interface between public corporations and private enterprises; the rules for deciding classification are set out in so far as they can be specified.The last sections of the paper put the statistics into their policy context and consider the value of public sector aggregates. The conclusion is that a general case cannot be made to justify assembling public sector aggregates for all countries; the need will be determined by the economic policies being pursued in a particular country. Although the United Kingdom gives considerable prominence to a public sector financial aggregate, the Public Sector Borrowing Requirement, the functions of the public corporations and the rest of the public sector are so disparate that consolidated accounts for the public sector are no longer prepared.

Notes: Has the underground economy caused the increase in United States GNP in recent years to be understated relative to earlier periods? The ratio of employment to population provides powerful evidence that it has not. This ratio’ was as high in the middle 1970s as in previous periods and in 1978–80 rose to its highest level of the postwar era, suggesting that employment growth has not been understated. Employment series based on both establishment reports and household surveys yield exceptionally high ratios in recent years. This article provides a step-by-step explanation of why employment data are pertinent to the question raised about GNP.This explanation may be summarized as follows. GNP measured as the sum of final products is not understated unless GNP measured as the sum of national income and other charges against GNP is also understated. Appreciable understatement of the growth of charges against GNP as a result of growth of the underground economy is highly unlikely in the absence of understatement of the growth of wages and salaries, because of the way the estimates are made. Understatement of the growth of wages and salaries without understatement of the growth of employment based on establishment reports is highly unlikely because of the way data are collected.The article explains briefly the relationship between income tax evasion and errors in measuring the various components of charges against GNP. It also explains how illegal activities are meant to be handled in GNP measurement.

Notes: The United Nations' newly completed study of purchasing power parities covering 34 countries varied in region, income level, and form of economic organization shows the systematic differences between the usual view of the structure of the world economy arising out of international comparisons based upon foreign exchange rate conversions and the structure one sees when actual prices are available.The real per capita GDP of developing countries is understated relative to developed countries when exchange rates are used in converting countries' national income accounts to a common currency, with the degree of understatement for any two countries being inversely related to the per capita income difference between them. The reason for this is that relative prices in the non-traded goods sector are lower relative to traded goods prices in low income countries. The systematic pattern observed in the 1975 data of the 34 countries has been extrapolated over time and space to get estimates of GDP for other years and countries.In the absence of detailed price data, the real shares of final expenditures devoted to particular components of the total can only be estimated as the proportion of own currency total expenditure devoted to the components. The observed differences in the pattern of prices of poor countries relative to rich for different components makes this clearly wrong for international comparisons, and in systematic ways. For example, (i) the relative price of services compared with commodities in poor countries is lower than in rich; so the apparent tendency of the share of services to rise as a country's income rises disappears when real quantities are considered; similarly, (ii) the relative price of capital goods is greater in poor countries compared with rich ones, so the difference in investment ratios out of GDP between rich and poor countries is understated.

Notes: The change in goods and services available in a national economy brought about by the shifting of external price relationships is referred to as the terms of trade effects. This paper reviews the various methods which have been devised since the war to define and quantify such effects on the Gross National Product. The statistical annex shows that, as far as OECD countries are concerned, the differences between the various measures are not significant. Whereas the effects from terms of trade represented, on average, less than one half of one percent of the GNP of OECD countries during the 1960's the percentage has increased substantially since 1973, due most importantly to the increase in the oil price; by 1977 (on a 1970 price basis), it had reached 5 percent of GNP in Japan and up to 6 percent in Italy. On the other hand, the extreme case of Saudi Arabia where various formulas generate effects amounting to between one half and the whole of GNP, indicates that the measurement of terms of trade effects by various methods may give different results.

Notes: The concern with income distribution has always mainly existed because of a concern with individuals' economic welfare. In recent years, the question has arisen whether the distribution of annual income—the distribution most often studied—is the best proxy for the distribution of economic welfare. Other measures, such as lifetime income, have been proposed instead.The paper starts with a discussion of how to define and measure the distribution of lifetime income. By using a simulation model, which partly consists of estimated functions and partly of tax functions taken directly from tax laws, distributions of lifetime income, variously defined, are then constructed. These distributions are compared with each other, and with distributions of annual income. The simulations indicate that the distribution of lifetime income is considerably less unequal than the distribution of annual income. Whether inheritances are included or not seems to be of no importance for the inequality of lifetime income. If, on the other hand, we include the value of leisure time in lifetime income, inequality increases by about 10–15 percent. Distributions of income after tax have Gini coefficients which are approximately 25 percent less than the Ginis for the before-tax distributions. We thus find that the picture of inequality we get is very much dependent on which income concept we use.

Notes: In this paper we deal with the question of which measures of economic well-being are adequate to identify those groups of households in the U.S. whose economic conditions justify public concern and assistance. We derive a utility based measure of economic well-being from the estimation of a complete set of consumer demand equations. The demand system is Lluch's Extended Linear Expenditure System (Lluch, 1973). Household characteristics are incorporated using the scaling method proposed by Barten (1966). Using the welfare indicator derived, we study the composition of the poorest part of the population, using data from the 1972–73 Consumer Expenditure Survey. We compare our results with those obtained using various other welfare indicators, including the official U.S. poverty line. We show that using different family composition adjustments significantly and systematically affects just who are considered to be at the bottom of the welfare distribution. We finally suggest that program designers therefore can improve their target efficiency by carefully selecting from among the acceptable indices of welfare when defining program eligibility.

Notes: In this article an attempt is made to generate internationally comparable income distribution data for the Federal Republic of Germany (1974), Mexico (1968) and the United Kingdom (1979). To that end, the same income concept and income unit were adopted for each country, i.e. respectively household available income and the household. Moreover, incomes from various sources were adjusted for inconsistency with National Accounts according to Altimir's methodology. The paper finds that the distribution of persons by household income per equivalent unit is probably the best way of looking at the distribution of economic welfare. It further demonstrates that the distribution of persons by household available income per capita is much closer to this ‘ideal’ distribution than the distribution of households by household available income. Finally, the paper discusses some of the problems arising from the fact that one normally works with grouped data. It is found that in the case of the three countries under study, grouping is likely to have had only a small impact on the results.

Notes: This paper discusses the history of the French development of satellite accounts during the late 1960s and 1970s, noting the circumstances that led to the initiation of work in this area and describing the types of problem encountered. It then goes on to draw, on the basis of the French experiment, more general conclusions and to present a proposed accounting framework. The final section considers the concept of social expenditure, but concludes that, at least for the present, it is not possible to construct a useful global concept.

Notes: The economy of Liberia is one in which, in spite of past satisfactory growth performance, a high level of income inequality persists. In 1977, for instance, a mere 2 percent of the people accounted for some 33 percent of nation-wide wage income. These people live disproportionately in Montserrado County in which the capital city is located. While each of the other counties are largely rural and poor, each has far lower intra-county inequality than wealthy Montserrado.Intersectoral location of the income-earner, average income levels and the extent of access to human capital formation opportunities are some characteristics of the economy that have been found to explain significant portions of intercounty variations in the levels of household income concentration. Income inequality is reduced with increases in the extent of agricultural activity as the share of the top income group falls and that of the bottom group rises. The reverse happens with growing urban-area activity. Higher income concentration occurs with rising per capita incomes as the top group's income share rises and the bottom income group's share falls. While this appears to be an instance of the Kuznet U-shaped hypothesis, here there are no definite signs of a possible reversal any time soon. The levels of access to educational facilities move inversely with the level of inequality, with expanding elementary facilities benefiting the poorer people at the expense of the wealthy while the reverse happens in the case of expanding secondary educational facilities.

Notes: This article describes what happens to income distribution during intensive changes in gross domestic product due to external market conditions. It deals specifically with an open market petroleum-based economy, Trinidad and Tobago, and reviews changes in national product and income levels and the income distribution pattern over the twenty year period 1957–76.The paper argues that during the period characterized by subperiods of steady growth and rapid growth in GDP (the latter associated with the petroleum price rise), income inequality increased between 1957 and 1972 and then decreased in the post petroleum-price-rise period of rapid growth 1973–76. While the effect of intensive changes in national product did trickle down to the lower income groups, income inequality in 1975–76 was greater than that existing in 1957–58. An examination of the spatial, occupational and temporal aspect of the distribution pattern points towards the elimination of structural dualism in the economy as the surest path towards greater income equality in Trinidad and Tobago.

Notes: The debate on how to deal with changes of relative prices in national accounts has, so far, remained inconclusive, especially with regard to the question of how to measure gains from changes of terms of trade. Keeping the experiences of the 1970s in mind (i.e. substantial changes of relative prices sparked off by increased oil prices), this state of affairs is not considered tenable.On this background, the paper takes up the old debate on how to deflate figures of domestic product, total as well as by industries. It tries to argue that deflated figures should be presented not only as real product figures by industries (using the double deflation method), but also as real income figures, obtained by deflating the current-prices figures of a certain year by the same general price index. When this is done according to procedures spelled out in detail, gains/losses from changes of the terms of trade in foreign trade will show up as an integral part of the framework.In the paper, special attention is given to the concept of industry terms of trade. On the basis of simplifying assumptions (which are, however, relaxed in the final part of the paper), it is shown how the ratio of real income divided by real product of a certain industry will be proportionate to the terms of trade of the industry concerned, when the latter concept is defined in the appropriate way. Furthermore, the sum of the industry gains/losses from changes of their terms of trade will be equal to the gain/loss of the economy taken as a whole from changes of the terms of trade in foreign trade.

Notes: In this paper, I investigate the validity of the Modigliani-Brumberg (M-B) model as an explanation of the variation of wealth holdings among households. The model as such, even with the inclusion of estimates of household lifetime earnings, explains only a minute portion of the variation in household wealth. Indeed, for certain groups such as non-white, rural residents, and the low educated, the coefficients of the regression model are insignificant. Moreover, when the top wealth holders are removed from the sample and when non-cash financial and business assets are eliminated from the household portfolios, the explanatory power of the M-B model increases markedly. Essentially, the validity of life-cycle wealth accumulation models must be restricted to the white, urban, educated middle classes and their accumulation of housing, durables, and cash. The rich have very different motives for saving and very different sources of saving, while the poor do not earn sufficient income over their lifetime to accumulate any non-negligible wealth.

Notes: This paper provides a description of the annual Input-Output Tables for Canada. It describes the accounting framework and notes its close affinity to the one described in the United Nations report, A System of National Accounts. It demonstrates the ready derivation of GDP and Expenditure on GDP, both in current and constant prices, from the Input-Output Accounts as well as their relationship to the other subsystems of the Canadian System of National Accounts, particularly the Income and Expenditure Accounts and Real Domestic Product by Industry. Compatibility of basic accounting records of the transactors with the rectangular (commodity-industry) format of the Canadian tables is described. The need to have a consistent commodity classification and to develop a consistent valuation of all transactors in the economy is emphasized. The particular formulation of the Input-Output Impact tables is noted. The problem of deflating trade margins and the resolution of this problem is described. A strong plea is made for the economics profession to pay more attention to the problem of aggregation; all economic analysis is approached with blinkers but the aggregation problem isn't even recognized as a blind spot in most analyses.

Notes: Cooperation between the Austrian and Hungarian central statistical offices in the field of industrial productivity has a history of two decades. The first comparison, carried out in 1965, was partly experimental in objective and nature. The second full scale survey took place a decade later in 1975. This was followed by a further study of about two years duration of the level of productivity and the factors influencing it in three sectors: food, metallurgy and engineering. For this study the three sectors were broken down into 31 sub-branches and nearly 400 product groups. An important and labour-intensive element of the comparisons was harmonization of the sector and product classification system; UN recommendations were increasingly helpful for this work, and relying upon them will be expedient also in the future.In the decade under review the productivity advantage of Austrian industry increased, from about 40 percent in 1965 to an average 75 percent in 1975. The dispersion of sectoral productivity indices around the average value was significant in both years.The similarity of the 1965 and 1975 comparisons offered an exceptional opportunity to examine the reliability of extrapolation. The investigations unambiguously demonstrated that extrapolation did not give reliable results for a period as long as ten years, primarily because of structural changes in production and changes in price weights.The most important conclusion to be drawn from the investigation of the three selected branches is its extraordinary usefulness from the economic, political and methodological points of view. A further important conclusion is that the method of comparison must be selected in the light of an extensive consideration of the output and technological structure of the branches.

Notes: This paper presents an analysis of the distributive impact of government expenditures in the United States. The analysis uses a household-level microdata file drawn from the 1970 U.S. Census of Population, with additional income and tax variables drawn from the Internal Revenue Service 1969—70 Tax File.The results are presented at both federal and local levels and include analyses of the distribution of individual benefits, as well as of overall taxes and net benefits. Since a microdata file was used, distributional effects are examined with respect not only to the “traditional” variables of income class and household size, but also with regard to the number of earners in the household and the sex and race of the household head.In a further paper in a subsequent issue of this review we will present the results of a similar analysis for the United Kingdom, and compare the results for the two countries.

Notes: In an important recent book dealing with the measurement of income inequality with particular reference to poverty,1 Prof. N. Kakwani derives several poverty indices, investigates the effect of negative income tax schemes with the help of those indices and gives a numerical illustration based on Malaysian data.The aim of this note is to point out some logical flaws in his argument. Some of the ideas expressed in the part of his book we are concerned with have been disseminated for some time now2 and referred to in subsequent literature;3 yet their shortcomings do not seem to have attracted anyone's attention. The introductory section gives a concise presentation of the relevant part of Kakwani's contribution. The next two sections deal with some problems with his approach.

Notes: The conceptual framework of the system specifies that societal resources are limited by two basic factors: the amount of available human time, and the stock of wealth inherited from the past. Wealth is defined very broadly to cover not only the conventional tangible capital assets familiar to economists, but also intangible human and other capital assets, stocks of organizational capital reflected by networks of social support systems (the family, the neighbourhood), stocks of environmental assets (the sun and air), and stocks of socio-political assets (security, freedom of choice). Human time covers market work, household production, leisure, and biological maintenance.Human time and capital stocks are used within households to produce a variety of tangible and intangible outputs, and these outputs in turn are used to produce a variety of satisfactions (utilities) or to augment stocks of capital, or both.The basic sources of well-being in the system are ultimately of two types: well-being is produced as a consequence of the intrinsic benefits from all activities engaged in by individuals, which is to say that people have preferences over the way they spend their time; secondly, people derive utilities from the existence of various stocks or states of society, and these satisfactions are independent of the way in which time is used. The satisfactions associated with flows of goods are subsumed by satisfactions derived from activities associated with those goods.The system contains a set of linkages among the various parts:inputs of goods and time are used to produce tangible household output, using the familiar notions of household production functions and constrained optimization; tangible household products, which are intermediate in the system, are used in conjunction with human time to produce direct satisfactions or to augment household capital stocks; both household (micro) and societal (macro) capital stocks are linked directly to psychological well-being; household activities are linked directly to flows of satisfactions, termed process benefits in the system; household preferences and values relating to policy variables are linked to public policies of various sorts, and policies modify the constraints and opportunities relevant for household decisions.The system also has dynamic linkages. Modifications of household or public stocks produce impacts on future flows of well-being; satisfactions from activities may adapt to the existence of constraints, hence changes in constraints can modify preferences and subsequently modify activities; and household behavior has a life-cycle dimension which is inherently dynamic.

Notes: The paper by Gerardi covers considerable ground, touching on a wide variety of issues in the area of international comparisons of product and purchasing power. Since our views on most of these subjects have been expounded in one or another of the International Comparison Project volumes and we will concentrate mainly on the central issue raised by Gerardi of the selection of an aggregation process that must somehow take account of the tastes of all the people who are the subject of an international comparison inquiry. In addition, we comment on some other points including the notion of special purpose PPPs. Finally, we make a brief statement about where we think future research will be most useful in improving international comparisons.

Notes: Just as intertemporal price indices have two functions, to measure price changes and to deflate current values to constant values, this is true also for interspatial price indices, purchasing power parities (PPPs). In practice these two functions of PPPs, for conversion and for comparing price levels, are not always distinguished, and this may have some disadvantages since in a number of cases the differences between the two PPPs might be considerable. The authors review the differences in content of the two types of PPPs, and make some suggestions for making the distinction more explicitly.

Notes: This paper explores the possibility of using the Classification of the Functions of Government published recently by the United Nations (COFOG) in order to segregate intermediate from final use of government production in the national accounts. It is argued that the notorious difficulties of doing that can be traced to two reasons, one the multiplicity of theoretical concepts, and the other the lack of sufficient detail at the statistical level. The first can be removed by clarifying that on the production account of an economy only production and not welfare is to be measured. The second seems to be overcome by the three-digit detail of COFOG. It is shown that many of these categories are now sufficiently homogeneous for a panel of experts to agree in assigning them to either intermediate or final use, although for a number of categories this is still difficult. The question is whether consensus in the major categories is large enough to consider the remaining controversial ones as border cases, normal in any classification and solved in the last instance not by argument but by convention. Some preliminary figures for the intermediate part of government production are given.

Notes: In the United States, the life-cycle relationship between initial Social Security contributions and subsequent benefits causes the effect of Social Security on income distribution to be overestimated in a single-period analytical framework. By separating the annuity from the redistributive aspects of Social Security we provide a life-cycle framework for measuring its net effect on redistribution. To this point in its history, we find all income classes have received positive net life-cycle income transfers and, in an absolute sense, upper-income groups have done at least as well as lower-income groups. This suggests a reason for the near-universal support of Social Security by past generations, as well as the controversy which now surrounds it. As it becomes apparent to younger cohorts of taxpayers that many of them will be net losers, it is inevitable that Social Security will be subject to the same controversy as other welfare programs which attempt to redistribute income.

Notes: Using data from the 1973 National Survey of Family Growth, the present study analyzes, for blacks and whites separately, the impact of female market activity on the inequality of the income distribution among households. The family life cycle is divided into three stages, according to the presence and age of children: (1) the interval between marriage and the birth of the first child, (2) the child-rearing interval, and (3) a final period which begins when all the children have reached school age. Using the coefficient of variation as an indicator of inequality, the empirical results show that in period 1, the contribution of white working wives has a large equalizing impact, while that of their black counterparts results in a slight increase in dispersion. In the child-rearing and post child-rearing stages, the labor supply of mothers decreases family income inequality by a small amount for both black and white households. A decomposition of the squared coefficient of variation of family income is presented to aid in the interpretation of these findings.

Notes: The public sector is defined here to include government plus public enterprises. Historically, economists and statisticians have been more concerned with its separate components than with the public sector as a whole, but it is suggested that the public sector may be an appropriate concept for studying several current problems of economic policy.While there is general agreement as to what constitutes government, countries have differing views about what makes an enterprise public. Differences in country definitions of public enterprises are identified as one of the main problems in making international comparisons for the public sector.Statistics are presented for up to 16 OECD countries on the share of the public sector in total final demand, value added, employment, and net lending. It is argued that there is rarely a unique answer to the question “How big is the public sector?” For most countries judicious selection of data and careful definition will lead to different conclusions about the size and growth of the public sector.Because of the lack of data, it is not possible to analyse public sectors in developing countries in the same detail as OECD countries. The evidence available suggests that while public sectors are about the same size in both OECD and developing countries, public enterprises play a more important role in the latter.

Notes: Following the growth of the public sector traditional measures of the size of the public sector have appeared to be inadequate for policy purposes. In the article the role of the public sector in the Finnish economy is described first by using some traditional methods and indicators. The historical background of the development is briefly discussed. After that some specific problems of the measurement are discussed. These problems include measurement of output and productivity, definition of appropriate balance of the public sector, different measures to describe the size and scope of the public sector, role of tax reliefs and subsidies, different organizational arrangements, public sector regulation etc.The growth of the public sector takes many different forms and it appears to be more difficult than formerly to obtain a comprehensive picture of the scope of the public sector. For different purposes different indicators have to be used. At the end of the paper the implications of the changing emphasis in the public policy are discussed.

Notes: This paper outlines a general strategy for constructing socio-demographic matrices, starting with a set of initial estimates based on available data and ending with a set of final estimates adjusted to meet the constraints connecting their true values.The method is described and illustrated by a numerical example taken from the author's current work on marital transition matrices. The figures relate to the male population of England and Wales in 1978 and are based on British official statistics of population numbers, births, deaths, migrations, marriages, widowhoods and divorces.

Notes: Extended accounts of total income and product and associated capital stocks for the United States, in current and constant dollars, are offered for the years 1946 to 1976. They include intangible and tangible capital accumulation and non-market and market outputs in all sectors, services of government and household capital and of unpaid household labor, and opportunity costs of students. Defense and police services are classified as intermediate product; a portion of commercial media services is counted as final product. Expenses related to work are subtracted while the values of employee training and human capital formation and net revaluations of existing tangible capital are added.Total incomes (TISA) net national product was 50 percent greater than official Bureau of Economic Analysis (BEA) NNP in 1976. BEA gross private domestic investment was only about 18 percent of TISA gross capital accumulation. Intangible investment and TISA net domestic capital accumulation grew more rapidly than BEA net private domestic investment. Household investment has been growing while there have been sharp declines in government investment, particularly in research and development. Contrary to some views of the import of the narrower BEA accounts, total capital accumulation appears to have risen considerably more rapidly than total consumption, 6.3 percent versus 2.2 percent per annum from 1946 to 1976, thus increasing sharply its share of TISA GNP.

Notes: The paper is mainly concerned with statistical problems relating to intermediate services that arise in the construction of national input-output (I–O) tables. Though these problems are sometimes discussed in the literature, their precise nature is usually not spelled out in any detail and this is done in the paper. The problems are closely related to the company-establishment statistical dichotomy permeating the ultimate sources and allocation of intermediate services. Important examples can be found regarding the statistical treatment of head offices, research and development expenditures, and international trade of intermediate services. Presently used procedures for Canadian and U.S. I–O compilation show evidence of statistical inconsistencies and lack an appropriate framework to utilize full information. The paper suggests a possible approach for reconciling company and establishment data based on industrial organization linkage studies at the microlevel. Considerable empirical support is offered, using various official Canadian statistical publications, to show that the suggested approach is both feasible and has desirable properties.The paper goes on to argue that the contemporary information technology revolution has profound implications for I–O compilation and use with special reference to intermediate services. Four major implications are explained in the context of the growing microelectronics technological change and related literature. Some basic suggestions are put forward with regard to joint-cost allocation and inter temporal comparisons problems with respect to I–O compilation. It also appears that some fundamental rethinking of commonly accepted standard industrial classification conventions may be called for in the near future if I–O tables are to remain relevant and viable. The paper thus features a somewhat broader view of I–O statistical problems than usual and attempts to show that this view is potentially appropriate to questions of economic policy formulation.

Notes: International comparisons always raise difficult problems, more especially when they deal with services which are jointly financed by households and government in varying shares with varying procedures in each country. This is obvious in the case of health where the area itself, the principles of economic analysis and the UN method of National Accounting appear to be either vague or unwieldy. Before any proposal it is necessary to review what is involved in the concept of service and the possibility of delimiting the health field inside which economic measures are feasible. Then using the SNA concept and with the help of six interdependent tables we propose two aggregates: the National Medical Consumption and the Current National Expenditure on health. The detailed and harmonized breakdowns of these global results make it possible to compare the structures of values, prices and quantities on an international base.

Notes: Although national and sector balance sheets have long been regarded as part of the national accounting framework, for a variety of reasons their compilation by official statisticians has been the exception rather than the rule. A programme of balance sheet work in the United Kingdom Central Statistical Office has recently been completed and the results published. The theoretical and practical problems arising in the course of this work are described and discussed. Summary results are given together with an interpretation of the main changes in the sectoral composition of national wealth between 1957 and 1975.

Notes: This paper presents an analysis of the distributive impact of public expenditures and taxes in the United Kingdom. The analysis uses household level microdata from the 1971 Family Expenditure Survey, with tax and expenditure aggregates drawn from the national accounts.The analysis is the first to allocate all taxes and public expenditures for the United Kingdom, and the results are compared to those from the more restricted analyses carried out by the U.K. Central Statistical Office. Results are presented for individual taxes and benefits as well as for overall net benefits and they describe distributional effects with respect to income class, household size, number of earners and housing tenure.A final section of the paper compares the results to those from a similar analysis for the United States which were reported in the previous issue of this review.

Notes: This paper considers the impact upon measures of corporate income of a number of concepts of the maintenance of the existing capital of an incorporated trading enterprise. A main distinction is drawn between the maintenance of all the assets employed in trading and the maintenance of the net assets attributable to the owners. Measures of income and of rates of return to capital depend on whether all the assets, or only the net assets attributable to the owners, are being considered. There are three sections of the paper after an introduction. Section 2 is conceptual and section 3 illustrates the concepts, with figures for U.K. manufacturing industry in 1975 to 1977, in which the figures in company balance sheets are adjusted from book values to estimated replacement cost, and estimates are made of depreciation at replacement cost and of the consumption of stock (inventories) at replacement cost. These figures follow the concept of maintaining physical assests. I have added calculations which extend the concept of capital maintenance to all operating or trading assets, including monetary working capital; and which then calculate the amounts necessary to maintain the assets attributable to the owners of a business. The three main methods are: to apply a gearing adjustment to abate the additional capital maintenance provisions for operating assets (which are realized revaluations by reference to their original cost); to take into income additionally the geared (or debt financed) portion of unrealized revaluations; and-what is conceptually much the same thing-to count as the charge for debt only real interest (which may be negative) rather than nominal interest. Section 4 considers some problems of aggregation, particularly the derivation of aggregates for the sectors of the economy, when based on figures for individual enterprises using the various approaches to capital maintenance.

Notes: Expanded measures of government output include imputed values of the services of government capital, uncompensated factor services of military draftees and jurors, and net revaluations, as well as the usually included compensation of employees. The government output is allocated to consumption, capital formation and product intermediate to other sectors, on the basis of its classification in ten broad functions: defense, space research, education, health, sanitation, transportation, parks and recreation, natural resources, welfare, and general administration. Final government product in 1976, including $116 billion in defense and $125 billion in education, amounted to $450.5 billion, which was 26.5 percent of the 1976 GNP. This final government product corresponded to the BEA measure of $191.6 billion.Total capital formation related to government is defined to include both government product which enters into capital formation in other sectors and government expenditures for its own capital accumulation. After a more rapid rate of growth in previous years, this total government capital formation in the United States in 1976 is found to exceed gross private domestic investment. A significant but only minor portion was found to be constituted by government expenditures for capital goods and change in government inventories. Investment in research and development, health and, particularly, education and training, were dominant components in capital formation related to government.

Notes: Stagflation is a combination of an increasing rate of inflation with a decreasing rate of real growth. It appears when the inflationary gap of production costs raises faster than the inflationary gap of expenditures on Gross Domestic Marketable Product. The decomposition of these two gaps into their main elements gives then the possibility of determining the sources of the inflationary increase in costs and the causes of the relative retardation of the inflationary increase in expenditures. The main cause of stagflation in 1974 for France and Germany was the huge rise in oil prices which had not been immediately followed by an equal rise in prices of their exports. The inflationary rise in wages is an almost permanent factor of stagflation in France; in Germany its responsibility is involved only before 1975. In France the insufficient increase in the inflationary gap of expenditures was mainly due to the restrictive monetary policy and to the official price regulation. In Germany the restrictive monetary policy also contributed to the slowdown in demand in 1974 and 1975. In 1977, on the contrary, the main cause of stagflation was the slackening of export demands due to the world recession and the revaluation of the DM.

Notes: This paper focuses on the use of statistical matching in the estimation and analysis of the size distribution of family unit personal income. The paper begins with a brief discussion of data on the size distribution of income in the U.S. and their limitations. Several methods of improving or augmenting those data are described, and earlier examples of statistical matching for that purpose are mentioned. A brief summary of the types of statistical matching methods which have been used is also presented. Then a recent example of statistical matching carried out at the Office of Research and Statistics, Social Security Administration, is described, and the effects on the size distribution of adjusting and augmenting the initial data using the statistically matched data from that example are shown. Material relating to the accuracy of that statistical match is presented in the appendix.

Notes: This article presents the results of the first French efforts to assemble information on the assets and liabilities of the different economic agents. The estimates cover the five-year period 1972–76, with complete balance sheets for the end of 1971, 1972, and 1976. The experimental efforts showed that estimation was feasible. It was possible to bring together the varied, often dispersed, and rarely consistent existing information into an integrated body of aggregates adapted to macroeconomic analysis. The report stresses the importance of articulating the wealth accounts logically with the flow accounts, into a complete, closed, and consistent whole in which the theoretical objectives are well specified. It also points out the limitations of the approach, stemming primarily from the state of the basic statistics relating to wealth.

Notes: This paper is concerned with the distribution of wealth in Sweden in 1975 and its development during the period 1920–75. The paper is based on a large study on wealth undertaken for the Swedish Commission on Wage-Earners and Capital Formation. The first report from this study was presented in 1979 as a book in Swedish: Roland Spånt, Den svenska förmögenhetsfördelningens utveckling (The Development of the Distribution of Wealth in Sweden), SOU 1979:9. That first report will also be published in English. Prior to that the main results can be found in this paper.During 1980–81 we intend to publish specific reports on the distribution of shareholding, the effects of inflation, the development of the distribution of wealth 1975–78, the importance of pension rights etc.

Notes: Present national accounting conventions regarding the treatment of flows and stocks in the petroleum sector are considered to be unsatisfactory. But changes in reporting requirements for oil and gas producers open up possibilities for a more satisfactory treatment.In this article some aspects of the newly adopted requirements are presented and the possible uses of the additional information available for improving social accounts are discussed.

Notes: Book reviewed in this article:Cedric Sandford et al, Costs and Benefits of VAT

Notes: The author discusses the prospects for trade union growth in this industry in the light of a case study of the development of a branch of the Transport and General Workers’ Union within the EMI-owned Angus Steak House chain.

Notes: A number of variations in working arrangements have emerged in Australia in recent years; one of these has been job-sharing. Here the author reports the results of a survey into the attitudes of trade unions in Australia towards the practice.

Notes: In this article the author reports the findings of research over a two year period into the role of ACAS conciliators in cases in which industrial tribunals decided in favour of applicants.

Notes: Book reviews in this article: WAGES POLICY IN THE BRITISH COALMINING INDUSTRY J. L. Handy THE MILITANCY OF BRITISH MINERS V. L. Allen BATTERED CHERUB Joe Gormley KING COAL Tony Hall THE DEGRADATION OF WORK?: SKILL, DESKILLING AND THE LABOUR PROCESS Edited by Stephen Wood SOVIET TRADE UNIONS: THEIR DEVELOPMENT IN THE 1970s Blair A. Ruble BLUE COLLAR WORKERS IN EASTERN EUROPE Jan F. Triska and Charles Gati (eds.) George Allen and Unwin

Notes: In this article the author describes workplace communities in British hotels and discusses the relationships between the workplace community and employees' subculture, family life and leisure patterns. He also discusses the role of the workplace community as an alternative to bureaucratic organisation and the consequences for people of working in a leisure context.

Notes: The currently high level of unemployment emphasises the importance (in policy terms) of the potential contribution of a self employment alternative. Here the author examines the available UK evidence on the degree of movement from unemployment to self employment, the factors influencing this movement and the role of labour market information and training.

Notes: Book reviews in this article: EXPLORING PARTICIPATION Paul Bate and lain Mangham WORKERS' PARTICIPATION IN DECISIONS WITHIN UNDERTAKINGS International Labour Office WORK PATTERNS Derek L. Bosworth and Peter J. Dawkins POWER AND POLITICS IN ORGANIZATIONS Samuel B. Bacharach and Edward J. Lawler DEMAIN, QUELS SYNDICATS?H. Landier CFDT LE RÉVE ET LA VIE J. C. Poulain

Notes: It has been argued recently that collective bargaining reform will contribute towards a successful incomes policy. The author in this note suggests that it is too soon to predict the demise of decentralised bargaining and the emergence of co-ordinated private sector bargaining with favourable outcomes for incomes policy.

Notes: The footwear industry is unique in its continuous use of joint local conciliation and arbitration boards to handle changes brought about by new technology and the contraction of its labour force. This case study draws on the experience of one board and assesses the wider lessons of an industry-wide arbitration system.