This document discusses issues related to measuring public capital from both statistical and methodological perspectives. Statistically, it is difficult to measure public capital due to differences in levels of government, distinguishing market vs. non-market industries, and defining public sector assets vs. functions. Methodologically, the main differences between public and private capital arise from the user cost expression used to value capital services. The document also examines measuring intangible public capital and notes that the SPINTAN FP7 project has funded research on these topics.
Private and Public Intangible Capital: Productivity Growth and New Policy Cha...SPINTAN
This document discusses expanding measures of intangible capital to fully account for public sector investments. It aims to:
1) Measure intangible capital in non-market sectors like education, health, public administration, and culture.
2) Analyze productivity for the total economy based on accounting for all intangible inputs.
3) Identify links between public and private intangible investments and their impacts on economic growth.
Private and Public Intangible Capital Productivity Growth and New Policy Chal...SPINTAN
This document discusses intangible capital and its importance for productivity growth. It makes three key points:
1) Intangible capital, such as research and development, human capital, and organizational investments, accounts for a significant share of economic growth, particularly when considering both private and public sector contributions.
2) Analyses that include measures of intangible capital investments find they contribute substantially to labor productivity growth, especially in knowledge-based industries and the public sector in some countries.
3) There are still policy challenges to fully embracing the implications of intangible capital for growth, but promoting core intangible investments is consistent with achieving higher productivity and living standards over the long run.
The SPINTAN project proposes to measure public sector intangibles in the EU and other countries. It aims to 1) clarify boundaries and measurement of public intangibles, 2) build a database on public intangibles for 22 EU and other nations, 3) analyze the impact of public intangibles on innovation, well-being and growth, 4) study spillover effects to the private sector, and 5) study the impact of austerity policies. The project involves multiple work packages to achieve these goals and will provide analysis to improve policymaking.
ICT, R&D and Non-R&D intangible capital: complementary relations and industry...SPINTAN
This document discusses a study analyzing the relationship between intangible capital (ICT, R&D, and non-R&D), their complementarity, and productivity growth across European countries and industries from 1995-2010. The main findings are: 1) Faster growing economies invested more in intangible capital like ICT and non-R&D, while slower economies relied more on tangible capital; 2) ICT, R&D, and non-R&D intangibles contributed significantly to productivity in most countries, especially in manufacturing; and 3) Non-R&D intangibles showed a strong correlation with ICT, suggesting they are important complementary policy factors for productivity.
Private and Public Intangible Capital: Productivity Growth and New Policy Cha...SPINTAN
This document discusses expanding measures of intangible capital to fully account for public sector investments. It aims to:
1) Measure intangible capital in non-market sectors like education, health, public administration, and culture.
2) Analyze productivity for the total economy based on accounting for all intangible inputs.
3) Identify links between public and private intangible investments and their impacts on economic growth.
Private and Public Intangible Capital Productivity Growth and New Policy Chal...SPINTAN
This document discusses intangible capital and its importance for productivity growth. It makes three key points:
1) Intangible capital, such as research and development, human capital, and organizational investments, accounts for a significant share of economic growth, particularly when considering both private and public sector contributions.
2) Analyses that include measures of intangible capital investments find they contribute substantially to labor productivity growth, especially in knowledge-based industries and the public sector in some countries.
3) There are still policy challenges to fully embracing the implications of intangible capital for growth, but promoting core intangible investments is consistent with achieving higher productivity and living standards over the long run.
The SPINTAN project proposes to measure public sector intangibles in the EU and other countries. It aims to 1) clarify boundaries and measurement of public intangibles, 2) build a database on public intangibles for 22 EU and other nations, 3) analyze the impact of public intangibles on innovation, well-being and growth, 4) study spillover effects to the private sector, and 5) study the impact of austerity policies. The project involves multiple work packages to achieve these goals and will provide analysis to improve policymaking.
ICT, R&D and Non-R&D intangible capital: complementary relations and industry...SPINTAN
This document discusses a study analyzing the relationship between intangible capital (ICT, R&D, and non-R&D), their complementarity, and productivity growth across European countries and industries from 1995-2010. The main findings are: 1) Faster growing economies invested more in intangible capital like ICT and non-R&D, while slower economies relied more on tangible capital; 2) ICT, R&D, and non-R&D intangibles contributed significantly to productivity in most countries, especially in manufacturing; and 3) Non-R&D intangibles showed a strong correlation with ICT, suggesting they are important complementary policy factors for productivity.
Haskel - Spillovers from public intangiblesinnovationoecd
This paper examines whether there are spillover effects from public intangibles like research and development (R&D) to private sector productivity. The authors constructed a new dataset covering 12 countries, 20 industries, and 4 time periods to analyze the relationship between non-market R&D spending and market sector productivity growth. Statistical analysis found a positive correlation, with countries that had higher lagged non-market R&D exhibiting higher subsequent market sector productivity growth. Regression results also suggested spillover effects from non-market R&D to market productivity, with estimated rates of return on public R&D found to be very high. The findings provide evidence that public investment in intangibles like R&D can boost private sector
Intangibles and Cultural and Creative IndustriesIvie
This document discusses two projects related to measuring intangible assets: the SPINTAN project and a Telefonica Foundation project. The SPINTAN project aims to extend existing frameworks to measure public sector intangibles across multiple EU and other countries. It will create a public sector intangibles database and analyze the impact of public intangibles on innovation, well-being, and growth. The Telefonica Foundation project measures intangible assets in Spain's private sector across 24 industries from 1995-2011 using various data sources. It aims to capture the importance of intangibles in the new knowledge economy.
Stephen Aldridge -Public sector efficiency in the UKOECD CFE
Presentation by Stephen Aldridge, Ministry of Housing, Communities and Local Government, UK at the OECD Workshop on Spatial Dimensions of Productivity, 28-29 March 2019, Bolzano.
More info: https://oe.cd/GFPBolzano2019
The Global Productivity Slowdown, Technology Divergence and Public Policy: A ...Structuralpolicyanalysis
1) Labour productivity at the global frontier remained robust, but laggard firms fell increasingly behind, leading to productivity divergence.
2) This divergence reflects divergence in multifactor productivity and likely technological divergence, driven partly by structural changes that allowed "winner-take-all" dynamics.
3) While some divergence was inevitable, policies promoting competition and diffusion, like pro-competitive product market reforms, could have helped lean against these forces and reduced divergence, particularly in services where reforms have slowed.
This document discusses the informal economy, innovation, and intellectual property. It begins by reviewing definitions of the informal economy and presenting statistical data on its size and economic significance. Estimates suggest informal employment makes up over half of non-agricultural employment in most middle- and low-income countries.
The document then applies concepts of innovation to the informal economy context. It discusses a spectrum of appropriation mechanisms for innovations, ranging from formal intellectual property rights to informal mechanisms.
Finally, the document reviews existing policy approaches toward innovation in the formal economy. It establishes a framework to consider future policy scenarios for applying intellectual property concepts to innovation in the informal economy. The overall aim is to better understand innovation, appropriation, and
The document summarizes a presentation on measuring the digital economy using evidence from BRICS countries. It finds that increased investment in digital technologies is positively associated with labor productivity, though the impact may be delayed due to measurement challenges and a gestation period. While digitalization has expanded rapidly, productivity gains are not always immediately visible in economic statistics, consistent with the "productivity paradox". The study aims to help inform economic policymaking, business decisions, and investment within and between BRICS nations.
Broadband expansion in France from 1997-2007 led to an increase in firm-level imports. Local access to broadband internet increased small and medium firm imports by around 25% after 5 years. This implies that without broadband expansion, French imports over 2001-2007 would have been around 15% lower. The effect was driven by firms importing from more countries and product categories with no change in spending per import. Imports of capital goods saw larger effects than other goods, suggesting broadband raised productivity. Around 25% of the total estimated consumer welfare gains from broadband in France can be attributed to increased imports.
This document provides an overview of the ICT industry in Catalonia, Spain. It discusses the definition of the global ICT industry and notes that Catalonia has over 15,000 ICT companies, 115,000 employees in the sector, and the industry generates €15.9 billion in annual turnover. The document also outlines opportunities for international market expansion for Catalan companies and technological/business opportunities in the Catalan ICT ecosystem.
The document discusses cultural sector mapping and using data for policymaking. It outlines how various countries collect statistics on their creative industries to measure their economic contribution. Creative industry mapping involves defining the sectors, collecting data on metrics like employment, businesses and exports to understand the industries' current value and growth potential. This evidence helps advocate for policies and funding to support the sectors. While statistics have limitations, regular mapping studies can track industry development and the impact of interventions over time.
Productivity Spillovers, Diffusion and Public Policies: A Portuguese PerspectiveStructuralpolicyanalysis
Lower productivity growth in Portugal is associated with several factors:
1) Slower adoption of digital technologies and globalization has led to a gap between frontier firms and other firms.
2) This was amplified by the economic crisis after 2008.
3) Portugal needs to increase multifactor productivity growth to converge faster with more developed economies like Canada, France, and Germany.
4) Lower productivity growth in Portugal does not seem to be associated with differences in productivity between firms in the same sector or with higher wage dispersion between high and low skilled workers.
Zoran Aralica - Green Industrial ApproachGreen Academy
1) Croatia experienced long-term economic decline between 1980-2013, with low growth, declining employment, and debt increases. Traditional industries like manufacturing declined while real estate and construction grew.
2) Weak institutions, a small domestic market after Yugoslavia's breakup, and a focus on locations rather than development hindered Croatia's economic transition. R&D investment and innovation were insufficient.
3) Recent EU policies promote smart, sustainable and inclusive growth through industrial modernization, boosting key technologies, and strengthening markets. Green growth aims to decouple economic growth from resource use and pollution.
THE INNOVATION IMPERATIVE
The economic downturn makes it imperative to find new sources of growth
Innovation is a means of dealing with global and social challenges
OUTLINE A MEASUREMENT AGENDA FOR THE FUTURE:
1 - Improve the measurement of broader innovation and its link to macroeconomic performance
2 - Invest in a comprehensive, high-quality data infrastructure for measuring impacts
3 - Recognise the role, and improve the measurement of, innovation in the public sector
4 - Invest in the design of new statistical methods and interdisciplinary approaches to data collection
5 - Promote measurement of innovation for social goals and of social impacts of innovation
The document discusses how the ICT industry in Europe is affected by the economic downturn. It outlines the main challenges as reduced IT budgets, increased competition, and difficulties obtaining financing. However, it also discusses hopes for the industry, as ICT is critical to economic growth and some areas like cloud computing still have potential. It recommends companies adapt to changes, look to local and international markets, and that the ServiceOne Alliance could provide opportunities for collaboration between members.
Social welfare is maximum in case of imperfect competitionAkeeb Siddiqui
There are two main approaches to welfare economics: the early neoclassical approach and the new welfare economics approach. The early approach assumes cardinal utility can be measured, while the new approach uses ordinal utility and Pareto efficiency. Perfect competition occurs when many small buyers and sellers trade homogeneous goods, while imperfect competition arises when firms have some control over prices through monopolies, oligopolies, or natural monopolies sanctioned by governments. Imperfectly competitive markets can result in inefficiencies like deadweight loss compared to perfectly competitive markets.
A Creative Block? The Future of the UK Creative IndustriesThink Ethnic
The document provides an overview of the future of the UK creative industries. It begins by reviewing the 2007 report "Staying Ahead", which celebrated the success of the UK creative industries but also identified some underlying vulnerabilities. Since its publication, the recession and trends like convergence, digitalization, and international competition have impacted the industry. The report examines these changes and their implications. It argues the UK creative industries still have growth potential but face challenges from global trends and competition that require a policy response to ensure they can continue contributing to the UK's economic recovery and future growth. The conceptual tools from "Staying Ahead" still provide value but require some revisions to fully capture today's context.
Claire Lelarge - What productivity impact to expect from high-speed rail infr...OECD CFE
Presentation by Claire Lelarge, RITM Université Paris-Sud, Paris, France at the OECD Workshop on Spatial Dimensions of Productivity, 28.28 March 2019, Bolzano.
More info: https://oe.cd/GFPBolzano2019
This document summarizes a study on the economic contribution of copyright-based industries in Pakistan. It conducted surveys of core, interdependent, partial and non-core copyright industries in Pakistan to estimate their contribution to GDP, tax revenues, trade and employment. The study found that copyright industries contributed Rs. 136 billion to GDP, Rs. 18 billion in indirect taxes. Exports from these industries totaled $943 million and imports totaled $2,130 million in 2007-2008. The electronic media industry employed around 47,000 people by the end of 2011.
Carlo Lavalle - From place of residence to place of activity: Emerging data a...OECD CFE
Presentation by Carlo Lavalle, Joint Research Centre, European Commission at the OECD Workshop on Spatial Dimensions of Productivity, 28-29 March 2019, Bolzano.
More info: https://oe.cd/GFPBolzano2019
This document summarizes research on extending measures of human capital. It discusses (1) conventional measures based on the Jorgenson-Fraumeni model, (2) extending the model to include employer-provided training, which accounts for about 2% of GDP in EU countries, (3) accounting for age cohort effects as newer surveys question assumptions of contemporaneous relative wages, and (4) the need to integrate measures of health capital with human capital measures since health affects earnings, retirement, and education incentives. The research aims to develop more comprehensive satellite accounts that combine measures of health and human capital.
A Methodolgy for Disentangling Public Funded R&D (GBARD) by IndustriesSPINTAN
This document presents a methodology for estimating government budget allocations for research and development (GBARD) by industry and further disaggregating it into information and communication technology (ICT) and non-ICT GBARD within each industry. The methodology uses a correspondence between the Nomenclature for the Analysis and Comparison of Scientific Programmes and Budgets (NABS) classification and NACE industry classification, along with labor cost data, to distribute GBARD data from Eurostat across industries. The results provide estimates of GBARD and ICT GBARD for each Member State and the EU28 for 2004-2013 at a detailed industry level following revisions to the NACE classification.
Haskel - Spillovers from public intangiblesinnovationoecd
This paper examines whether there are spillover effects from public intangibles like research and development (R&D) to private sector productivity. The authors constructed a new dataset covering 12 countries, 20 industries, and 4 time periods to analyze the relationship between non-market R&D spending and market sector productivity growth. Statistical analysis found a positive correlation, with countries that had higher lagged non-market R&D exhibiting higher subsequent market sector productivity growth. Regression results also suggested spillover effects from non-market R&D to market productivity, with estimated rates of return on public R&D found to be very high. The findings provide evidence that public investment in intangibles like R&D can boost private sector
Intangibles and Cultural and Creative IndustriesIvie
This document discusses two projects related to measuring intangible assets: the SPINTAN project and a Telefonica Foundation project. The SPINTAN project aims to extend existing frameworks to measure public sector intangibles across multiple EU and other countries. It will create a public sector intangibles database and analyze the impact of public intangibles on innovation, well-being, and growth. The Telefonica Foundation project measures intangible assets in Spain's private sector across 24 industries from 1995-2011 using various data sources. It aims to capture the importance of intangibles in the new knowledge economy.
Stephen Aldridge -Public sector efficiency in the UKOECD CFE
Presentation by Stephen Aldridge, Ministry of Housing, Communities and Local Government, UK at the OECD Workshop on Spatial Dimensions of Productivity, 28-29 March 2019, Bolzano.
More info: https://oe.cd/GFPBolzano2019
The Global Productivity Slowdown, Technology Divergence and Public Policy: A ...Structuralpolicyanalysis
1) Labour productivity at the global frontier remained robust, but laggard firms fell increasingly behind, leading to productivity divergence.
2) This divergence reflects divergence in multifactor productivity and likely technological divergence, driven partly by structural changes that allowed "winner-take-all" dynamics.
3) While some divergence was inevitable, policies promoting competition and diffusion, like pro-competitive product market reforms, could have helped lean against these forces and reduced divergence, particularly in services where reforms have slowed.
This document discusses the informal economy, innovation, and intellectual property. It begins by reviewing definitions of the informal economy and presenting statistical data on its size and economic significance. Estimates suggest informal employment makes up over half of non-agricultural employment in most middle- and low-income countries.
The document then applies concepts of innovation to the informal economy context. It discusses a spectrum of appropriation mechanisms for innovations, ranging from formal intellectual property rights to informal mechanisms.
Finally, the document reviews existing policy approaches toward innovation in the formal economy. It establishes a framework to consider future policy scenarios for applying intellectual property concepts to innovation in the informal economy. The overall aim is to better understand innovation, appropriation, and
The document summarizes a presentation on measuring the digital economy using evidence from BRICS countries. It finds that increased investment in digital technologies is positively associated with labor productivity, though the impact may be delayed due to measurement challenges and a gestation period. While digitalization has expanded rapidly, productivity gains are not always immediately visible in economic statistics, consistent with the "productivity paradox". The study aims to help inform economic policymaking, business decisions, and investment within and between BRICS nations.
Broadband expansion in France from 1997-2007 led to an increase in firm-level imports. Local access to broadband internet increased small and medium firm imports by around 25% after 5 years. This implies that without broadband expansion, French imports over 2001-2007 would have been around 15% lower. The effect was driven by firms importing from more countries and product categories with no change in spending per import. Imports of capital goods saw larger effects than other goods, suggesting broadband raised productivity. Around 25% of the total estimated consumer welfare gains from broadband in France can be attributed to increased imports.
This document provides an overview of the ICT industry in Catalonia, Spain. It discusses the definition of the global ICT industry and notes that Catalonia has over 15,000 ICT companies, 115,000 employees in the sector, and the industry generates €15.9 billion in annual turnover. The document also outlines opportunities for international market expansion for Catalan companies and technological/business opportunities in the Catalan ICT ecosystem.
The document discusses cultural sector mapping and using data for policymaking. It outlines how various countries collect statistics on their creative industries to measure their economic contribution. Creative industry mapping involves defining the sectors, collecting data on metrics like employment, businesses and exports to understand the industries' current value and growth potential. This evidence helps advocate for policies and funding to support the sectors. While statistics have limitations, regular mapping studies can track industry development and the impact of interventions over time.
Productivity Spillovers, Diffusion and Public Policies: A Portuguese PerspectiveStructuralpolicyanalysis
Lower productivity growth in Portugal is associated with several factors:
1) Slower adoption of digital technologies and globalization has led to a gap between frontier firms and other firms.
2) This was amplified by the economic crisis after 2008.
3) Portugal needs to increase multifactor productivity growth to converge faster with more developed economies like Canada, France, and Germany.
4) Lower productivity growth in Portugal does not seem to be associated with differences in productivity between firms in the same sector or with higher wage dispersion between high and low skilled workers.
Zoran Aralica - Green Industrial ApproachGreen Academy
1) Croatia experienced long-term economic decline between 1980-2013, with low growth, declining employment, and debt increases. Traditional industries like manufacturing declined while real estate and construction grew.
2) Weak institutions, a small domestic market after Yugoslavia's breakup, and a focus on locations rather than development hindered Croatia's economic transition. R&D investment and innovation were insufficient.
3) Recent EU policies promote smart, sustainable and inclusive growth through industrial modernization, boosting key technologies, and strengthening markets. Green growth aims to decouple economic growth from resource use and pollution.
THE INNOVATION IMPERATIVE
The economic downturn makes it imperative to find new sources of growth
Innovation is a means of dealing with global and social challenges
OUTLINE A MEASUREMENT AGENDA FOR THE FUTURE:
1 - Improve the measurement of broader innovation and its link to macroeconomic performance
2 - Invest in a comprehensive, high-quality data infrastructure for measuring impacts
3 - Recognise the role, and improve the measurement of, innovation in the public sector
4 - Invest in the design of new statistical methods and interdisciplinary approaches to data collection
5 - Promote measurement of innovation for social goals and of social impacts of innovation
The document discusses how the ICT industry in Europe is affected by the economic downturn. It outlines the main challenges as reduced IT budgets, increased competition, and difficulties obtaining financing. However, it also discusses hopes for the industry, as ICT is critical to economic growth and some areas like cloud computing still have potential. It recommends companies adapt to changes, look to local and international markets, and that the ServiceOne Alliance could provide opportunities for collaboration between members.
Social welfare is maximum in case of imperfect competitionAkeeb Siddiqui
There are two main approaches to welfare economics: the early neoclassical approach and the new welfare economics approach. The early approach assumes cardinal utility can be measured, while the new approach uses ordinal utility and Pareto efficiency. Perfect competition occurs when many small buyers and sellers trade homogeneous goods, while imperfect competition arises when firms have some control over prices through monopolies, oligopolies, or natural monopolies sanctioned by governments. Imperfectly competitive markets can result in inefficiencies like deadweight loss compared to perfectly competitive markets.
A Creative Block? The Future of the UK Creative IndustriesThink Ethnic
The document provides an overview of the future of the UK creative industries. It begins by reviewing the 2007 report "Staying Ahead", which celebrated the success of the UK creative industries but also identified some underlying vulnerabilities. Since its publication, the recession and trends like convergence, digitalization, and international competition have impacted the industry. The report examines these changes and their implications. It argues the UK creative industries still have growth potential but face challenges from global trends and competition that require a policy response to ensure they can continue contributing to the UK's economic recovery and future growth. The conceptual tools from "Staying Ahead" still provide value but require some revisions to fully capture today's context.
Claire Lelarge - What productivity impact to expect from high-speed rail infr...OECD CFE
Presentation by Claire Lelarge, RITM Université Paris-Sud, Paris, France at the OECD Workshop on Spatial Dimensions of Productivity, 28.28 March 2019, Bolzano.
More info: https://oe.cd/GFPBolzano2019
This document summarizes a study on the economic contribution of copyright-based industries in Pakistan. It conducted surveys of core, interdependent, partial and non-core copyright industries in Pakistan to estimate their contribution to GDP, tax revenues, trade and employment. The study found that copyright industries contributed Rs. 136 billion to GDP, Rs. 18 billion in indirect taxes. Exports from these industries totaled $943 million and imports totaled $2,130 million in 2007-2008. The electronic media industry employed around 47,000 people by the end of 2011.
Carlo Lavalle - From place of residence to place of activity: Emerging data a...OECD CFE
Presentation by Carlo Lavalle, Joint Research Centre, European Commission at the OECD Workshop on Spatial Dimensions of Productivity, 28-29 March 2019, Bolzano.
More info: https://oe.cd/GFPBolzano2019
This document summarizes research on extending measures of human capital. It discusses (1) conventional measures based on the Jorgenson-Fraumeni model, (2) extending the model to include employer-provided training, which accounts for about 2% of GDP in EU countries, (3) accounting for age cohort effects as newer surveys question assumptions of contemporaneous relative wages, and (4) the need to integrate measures of health capital with human capital measures since health affects earnings, retirement, and education incentives. The research aims to develop more comprehensive satellite accounts that combine measures of health and human capital.
A Methodolgy for Disentangling Public Funded R&D (GBARD) by IndustriesSPINTAN
This document presents a methodology for estimating government budget allocations for research and development (GBARD) by industry and further disaggregating it into information and communication technology (ICT) and non-ICT GBARD within each industry. The methodology uses a correspondence between the Nomenclature for the Analysis and Comparison of Scientific Programmes and Budgets (NABS) classification and NACE industry classification, along with labor cost data, to distribute GBARD data from Eurostat across industries. The results provide estimates of GBARD and ICT GBARD for each Member State and the EU28 for 2004-2013 at a detailed industry level following revisions to the NACE classification.
The document discusses the productivity gap between the EU and other countries like the US. It provides several figures and analyses that show:
1) Labour productivity growth in the EU has been modest compared to other major economies over the period 1995-2015.
2) While the gap decreased in some manufacturing industries between 2006-2013, all other countries performed better than the EU in services.
3) The US widened its lead over the EU in most industries, but narrowed the gap in ICT industries.
4) Factors that may contribute to the EU's disappointing productivity performance include a lack of flexibility in labor markets, regulations, and lower investment and spending on intangible assets like R&D compared to
Intangible Assets and Spanish Economic GrowthSPINTAN
This document analyzes the role of different types of capital accumulation, including tangible, intangible, ICT, and public capital, as sources of economic growth in the Spanish economy from 1995 to 2011. It uses an econometric production function approach with industry-level data to examine the direct effects of different capital types and potential complementarities, particularly between intangible and ICT capital. Preliminary results suggest intangible capital may help explain productivity differences across industries and that intangible assets could be complementary to ICT capital, though more analysis is needed.
Modeling market and nonmarket Intangible investments in a macro-econometric f...SPINTAN
Modeling market and nonmarket Intangible investments in a macro-econometric framework. Sociedty for Economic Measurement Annual Conference. Thessaloniki July 2016
The workshop will take place on November 19-20, 2015 at the Universitat de València in Room 3P17. The workshop will address issues related to R&D strategies and competitiveness in global markets. Researchers will present and discuss high-quality research on topics such as understanding international productivity slowdowns, the role of ICT and human capital, adoption of new technologies, competition and innovation, R&D intensity for exporters, and factors affecting foreign R&D spillovers. The scientific committee is chaired by Rafael Moner Colonques and includes professors from Universitat de València and ERICES.
Sources of country-sector productivity growth: total factor productivity and ...SPINTAN
This document summarizes findings from a study analyzing sources of productivity growth across countries and industries from 1995-2013, accounting for tangible and intangible capital. Key findings include:
1) Intangible capital provided larger contributions to productivity growth than tangible capital in some countries like the UK and US.
2) Intangible investment proved more resilient than tangible investment during the financial crisis and recovered more quickly in most countries.
3) Capital reallocation terms suggest some countries saw capital flowing to industries with above-average growth after the crisis, indicating productive reallocation.
Public Sector Intangibles: The SPINTAN ProjectSPINTAN
Paper by Matilde Mas on the SPINTAN Project presented in the 10th World Conference on Intellectual Capital for Communities, University Paris-Sud, June 5th and 6th 2014
Session 4 a diewert discussion of public sector intangiblesIARIW 2014
This summary provides an overview of the key points from the document:
(1) The paper aims to estimate intangible investments and capital for non-market sectors of EU economies, building on prior work that developed a framework for capitalizing intangible expenditures.
(2) The authors discuss conceptual issues in measuring public sector intangibles, such as determining asset service lives and appropriate discount rates. They present preliminary estimates for three categories of public intangible expenditures.
(3) The document criticizes some of the authors' assumptions and methodologies. It questions whether all expenditures, like advertising, truly have long-term benefits worth capitalizing. More details on methods and limitations are needed. Capitalizing
This document summarizes a paper that discusses ways to better measure a country's total income by accounting for factors not captured in official statistics, such as underground economies. It outlines four main issues in income measurement according to the OECD: 1) accounting for illegal activities, 2) measuring depreciation of capital, 3) enabling international GDP comparisons, and 4) accounting for environmental costs. The document then focuses on proposed methods for estimating the size of underground economies using currency demand approaches, adjusting for purchasing power parity in international GDP comparisons, and producing satellite accounts to incorporate environmental impacts.
The document discusses various concepts related to national income, including:
1. National income is defined as the aggregate factor income arising from a nation's current production of goods and services. It can be measured as the sum of incomes, net outputs by sector, or sum of expenditures.
2. Key concepts include gross national product (GNP), net national product (NNP), national income at market prices, national income at factor cost, and personal income. NNP is GNP less depreciation, while national income deducts indirect taxes and adds subsidies from NNP.
3. In India, national income is estimated using sectoral approaches like the net product method for agriculture and manufacturing, and expenditure methods
1) GDP is the total market value of all final goods and services produced within a country in a given period of time, usually a year. It can be calculated through the expenditure approach by adding consumption, investment, government spending, and net exports.
2) GDP growth reflects growth in productivity and living standards over the long run. However, GDP fluctuates in the short run due to business cycles, which include periods of expansion when GDP increases and recessions when GDP decreases.
3) While GDP is a key indicator of economic activity, it does not capture all factors that influence living standards such as household production, leisure time, or environmental quality. Alternative measures attempt to incorporate these limitations.
Chapter # 2 of macroeconomics by mankiw 9th edition. Measurements of national income in a small and large economy. Different concepts of national income are explained such as gdp, gnp, gni, disposable income, personal disposable income etc. Additionally, concepts such as depreciation and its impact on national income is also explained. The national income identity is elaborated along with 3 different methods to measure national incomes
This document discusses the measurement of macroeconomic aggregates including national product and national income. It defines key terms like GDP, GNP, NDP and describes the output, expenditure and income methods used to measure national income. It also discusses real vs nominal GNP, price indices, money supply measures, difficulties in measurement and the uses of national income statistics.
Quiz, week #2Measuring macro outcomesMy expectations are that .docxcatheryncouper
Quiz, week #2
Measuring macro outcomes
My expectations are that it will take a page or more to answer the two questions below
1.Are people worse off when the price level rises as fast as their income? Why do people often feel worse off in such circumstances?
2.Identify two groups that benefit from deflation and two that lose.
Chapter 5
1.NATIONAL-INCOME ACCOUNTING
This chapter introduces national-income accounting. The data generated by national-income accounting is used to track the economy’s performance. This chapter provides a framework on which future chapters will build. The three questions that are to be kept in mind while reviewing the chapter are:
1. How much income is being produced? What is it being used for?
2. How much income is being generated in the marketplace?
3. What’s happening to prices and wages?
OUTLINE
I. Introduction
A. Government only wants to tackle problems that it can measure.
B. The Great Depression resulted in a commitment to national income accounting.
1. Definition: National-Income Accounting – The measurement of aggregate economic activity, particularly national income and its components.
2. Developed by Simon Kuznets and the U.S. Department of Commerce, it answers questions such as:
• How much output is being produced? What is it being used for?
• How much income is being generated in the marketplace?
• What’s happening to prices and wages?
II. Measures of Output
A. Gross Domestic Product (GDP) (Figure 5.1a and b, Table 5.1)
1. Definition: Gross Domestic Product (GDP) – The total dollar value of final output produced within a nation’s borders in a given time period.
2. The use of prices to value market output allows us to summarize output activity and compare outputs of one period with that of another.
3. GDP vs. GNP
• GNP refers to output produced by American-owned factors regardless of location.
• GDP refers to output produced within America’s borders.
• GDP is geographically focused, including all output produced within a nation’s borders regardless of whose factors of production are used to produce it.
• For example, Apple’s output in Singapore ends up in Singapore’s GDP; the cars produced at Honda’s Ohio plant are counted in US GDP.
4. International Comparisons
• The geographic focus of GDP facilitates international comparisons of economic activity.
• The World View in chapter 2 illustrates a comparison of GDP values.
5. GDP per Capita
• Definition: GDP per Capita - Total GDP divided by total population: average GDP.
• GDP per capita is commonly used as a measure of a country’s standard of living.
• Disparities in per capita GDP mean that people in low-income countries have little access to telephones, televisions, paved roads, schools, and healthcare.
• World View: “Global Inequalities”
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1. This project has received funding from the European Union’s Seventh Framework Programme for
research, technological development and demonstration under grant agreement No. 612774
PUBLIC CAPITAL
Measurement Issues
Matilde Mas (University of Valencia and Ivie)
SEM CONFERENCE
OECD, Paris, July 22nd-24th, 2015
2. 2
INDEX
PUBLIC CAPITAL: MEASUREMENT ISSUES
PUBLIC CAPITAL. STATISTICAL ISSUES
METHODOLOGICAL PROBLEMS
1. Rates of return of public vs private capital
2. Endogenous vs exogenous calculations
3. User cost expression for the market economy
INTANGIBLE PUBLIC CAPITAL.
SPINTAN FP 7 PROJECT
3. 3
INDEX
PUBLIC CAPITAL: MEASUREMENT ISSUES
PUBLIC CAPITAL. STATISTICAL ISSUES
METHODOLOGICAL PROBLEMS
1. Rates of return of public vs private capital
2. Endogenous vs exogenous calculations
3. User cost expression for the market economy
INTANGIBLE PUBLIC CAPITAL
4. 4
PUBLIC CAPITAL. STATISTICAL ISSUES
Main problems faced from the statistical side
Different levels of government
Market vs non-Market industries
Assets vs Public Functions
PUBLIC CAPITAL
5. PROBLEMS FROM THE STATISTICAL SIDE
5
• Different levels of government included. It can differ between countries and it
can be difficult to have information regarding all of them with the required level
of disaggregation.
• Market vs. non-market industries. GFCF data is usually split by industry, but
not by institutional sector.
• By industry: NACE Rev. 2, ISIC, Rev. 4, NACE Rev.1.1, NAICS, etc.
• By institutional sector: Non-financial corporations (S11), Financial corporations
(S12), General government (S13), Households (S14) and Non-profit Institutions
Serving Households (NPISH) (S15)
• Problems to measure total public GFCF: public budgets do not follow NA
criteria.
• Besides, investments made by the public sector through capital transfers
to (legally) private firms will not be recorded neither by NA nor by COFOG
data.
6. PROBLEMS FROM THE STATISTICAL SIDE
6
• Market vs non-market industries
• Non-market vs. public sector
• Definition of public sector: Government sector (S13) or Government
sector + NPISH (S13+S15)?
–ESA 2010 definition: “The public sector consists of all institutional units
resident in the economy that are controlled by government. The private
sector consists of all other resident units.”
–Table 1 sets out the criteria used to distinguish between public and
private sector and between market and non-market
Criteria
Controlled by
government (public
sector)
Privately controlled
(private sector)
Non-market output General government NPISH
Market output Public corporations Private corporations
7. PROBLEMS FROM THE STATISTICAL SIDE
7
• Market vs non-market industries
• Non-market/public activities are generally concentrated in a few
industries:
– Scientific research and development (NACE Rev. 2 M72),
– Public administration and defence; compulsory social security (O84), Education
(P85)
– Human health activities (Q86)
– Social work activities (Q87-Q88)
– Creative, arts and entertainment activities, gambling and betting activities (R92-
R92).
• It is difficult to separate the market and non-market part of these
industries.
• Moreover, lately NSI and international databases tend to not split
these industries between market and non-market components (or
public-private): cross-classified NA data by industry and
institutional sector are not available for the majority of
countries.
8. 8
INDEX
PUBLIC CAPITAL: MEASUREMENT ISSUES
METHODOLOGICAL PROBLEMS
1. Rates of return of public vs private capital
2. Endogenous vs exogenous calculations
3. User cost expression for the market economy
References:
• OECD (2001): “Measuring Productivity” OECD Manual
• OECD (2009): “Measuring Capital” OECD Manual
• OECD (2010): “Handbook on Deriving Capital Measures of Intellectual
Property Products”
9. 9
From the methodological perspective the distinction between
private and public capital is not relevant for individual assets (as
long as the information is available). The main difference between the
two arises from the user cost expression.
For Public capital:
• National Accounts (NA) do not assign a net return to the flow of
services provided by public capital.
• The only recognized flow is public fixed capital consumption.
• Thus, the main difference with respect to private capital services
comes from the user cost expression which transforms the
volume index of capital of an asset into the Value of its capital
services.
METHODOLOGICAL PROBLEMS
10. 10
Main Implications:
1. NA Gross Operating Surplus figures are underestimated
because the value of the capital services provided by public
capital is not fully considered.
2. Consequently, the value of output is also underestimated in
NA figures, afecting both its level and its rate of growth.
Three different points are discussed here:
1. Rate of return of public vs private capital
2. Exogenous vs Endogenous calculations
3. User cost expression
METHODOLOGICAL PROBLEMS
11. 11
Assume that the ownership of Kj,t (Volume Index of Capital for asset j) is
divided between private (Kp
j,t) and public (Kg
j,t) at time t. The superscript
p and g refer to private (p) and public (g) capital, respectively.
The value of the capital services (VCSj,t) provided by asset j at time t
can be computed as:
[1a]
Or, alternatively, as
[1b]
cuj,t = user cost of the capital services.
1. Rate of Return of Public vs Private Capital
, , 1 , , 1
*
, j t j t j t j t
p p g g
j tVCS cu K cu K
, , 1 , , 1 , , 1, j t j t j t j t j t j t
p g
j tVCS cu K cu K cu K
12. 12
Equation [1a] assumes that the user cost (more specifically, the
rate of return) is the same for private and publicly owned assets
An example is Nordhaus´ (2004) basic principle for measuring non-
market activities: “Non-market goods and services should be treated as
if they were produced and consumed as market activities. Under this
convention, the prices of non-market goods and services should be
imputed on the basis of the comparable market goods and services”
(pg. 5).
Equation [1b] assumes that the rates of return are different.
Examples: Jorgenson and Landfeld (2004) ; OECD Manual (2009) or
Moulton (2004).
Jorgenson and Landfeld (2004): “For government, the imputed rate
of return is set equal to the average of corporate, non-corporate, and
household rates of return…” (pg. 35)
1. Rates of Return of Public vs Private Capital
13. 13
OECD Manual (2009) makes a similar recommendation than
Jorgenson and Landfeld (2004) but only when full information on
rates of return for the market and the household sector is
available.
When this information is not available it recommends to use the
household rate of return measured by the social rate of time
preference. It also suggests the borrowing rates for government
bonds as an alternative (pgs 142-144).
Moulton (2004), following Slater and Davies (1998) proposes four
general ways of estimating the rate of return of government fixed
capital: a) by means of an econometric estimation; b) the use of a pre-
determined rate such as the rate set by the U.S. Office of Management
and Budget (OMB); c) the rate of return for comparable private
business activities; or d) the interest rate at which governments borrow
1. Rates of return of Private vs Public Capital
14. 14
As for the rate of return in the user cost expression two approaches are
used: Endogenous (ex-post) or Exogenous (ex-ante)
OECD (2009) recommendation: “There are at least two situations when the
exogenous approach(…) is a useful choice:
First, when the stock of assets considered is incomplete…(such as for) land
for which information may not be available or at least not with reliable quality
(…).
Second, “when no empirical distinction can be made between the market
sector and the government sector, computations with an endogenous
approach will imply a downward bias of the rate of return because there is no
net operating surplus for government assets so that the market sector´s
operating surplus will be brought into relation with an asset base that comprises
assets in the total economy and is therefore too big” (pg. 139).
The Spanish estimates (FBBVA-Ivie) follow the exogenous approach for
both, private and public capital.
2. Endogenous vs Exogenous calculations
15. 15
Lets assume that we chose the endogenous approach. Then,
• According to NA practices:
GOSNA = GOSNA (private)+Public Capital Consumption
GOS = Gross operating surplus; NA = National Accounts; j assets, t
time and i industries.
• From an analytical perspective:
GOS (private, p) = Value of private capital services
,
, , 1 , , 1
NA NA p g
j t j t j i tj i
GOS GOS p KP
,
, , , 1=NA p p
j t j i tj i
GOS cu KP
2. Consistent use of the endogenous approach
16. 16
, , , 1 , , 1
, , , ,( , , )
NA NA p g
t j t j i t j i tj i
NA NA NA
j t j t t j t j t
GOS cu KP KP
cu cu r
• Standard computation of the internal rate of return:
• Consistent computation: Compute the internal rate of return
considering only the market sector:
where R stands for Revised.
,, , 1 , , 1 , , 1
, , , ,, ,
j t
NA g R p
t j t j t j i t j i tj i j i
R R R
j t j t t j t j t
GOS p KP cu KP
cu cu r
2. Consistent use of the endogenous approach
17. 17
2. Consistent use of the endogenous approach
Be aware that in order to use consistently the endogenous approach we
need to have a clear distinction between assets belonging to the market
and non-market industries, something that it is not guaranteed.
Furthermore, if this distinction is not guarantee, the different treatment of
taxes for:
i. corporations subject to corporate income taxes;
ii. unincorporated businesses subject to personal income taxes; and
iii. non profit institutions that charge economically significant prices but
are not subject to taxation
Makes ex-post measures of the private return to (unsubsidized) capital
very difficult to recover from industry accounts that blend private and
publicly subsidized enterprises and record values at basic prices
(Corrado and Jäger, 2015)
18. 18
3. User cost expression
User cost expression for the market economy
In practice, the user cost expression can adopt different versions. Let’s
consider the general expression for the market GOSNA given by [2] and assume
that
[2]
where revised nominal rate of return; 𝛿 depreciation rate; 𝑞 capital
gains/losses term; 𝑃 Price; 𝑗 asset; 𝑖 industry.
So that [2] transforms into
[3]
Mas, Pérez and Uriel (2005), following Harper, Berndt and Wood (1989),
consider the four different specifications appearing in Table 3.
, , , ,( )R R
j t t j t j t j tcu i q P
,, , 1 , , 1 , , 1
, , , , , 1
j t
NA g R p
t j t j t j i t j i tj i j i
R P
t j t j t j t j i tj i
GOS p KP cu KP
i q P KP
R
ti
19. 19
Four procedures to calculate user cost
Procedure Rate of return (i) Capital gains/losses (q)
M1 Endogenous (see equation 3)
Current variations in prices
, , 1
, 1
j t j t
jt
j t
p p
q
p
M3
Exogenous r = 4%
e
t ti r
inflation (ICP)
1 1
3
e t t t
t
Expected variations ,( )e
j tq
,
e
j tq (expected) =
, 1 , , 1
3
j t j t j tq q q
M4 Endogenous (see equation 3) Expected variations ,( )e
j tq as M3
M5
Exogenous
Long-term government bond yields
Expected variations ,( )e
j tq as M3
Source: Mas, Pérez and Uriel (2005) “El stock y los servicios de capital en España (1964-2002): Nueva metodología”, Fundación
BBVA.
, , 1 , , , , 1 , , , 1( ) ( ) C
t j t j t t j t j t j t j t t j t j t j t
j j
GOS KP i d q p KP i d q KP [3]
GOS = gross operating surplus; t = time; = user cost; j = assets;
KPC
= nominal productive capital; d = depreciation; p = prices
3. User cost expression
22. 22
Table 3. Value of Capital Services. Market Economy. Spain. Software
Differences from the endogenous M1 assumption
a) Levels (percentage over M1)
1970 1980 1990 2000 2005 2009
M3 0,92 0,91 0,94 0,87 0,91 1,17
M4 1,00 0,96 0,98 0,95 0,99 1,13
M5 0,84 0,86 1,01 0,83 0,82 1,11
b) Average annual rates of growth (percentage points difference)
1970-1980 1980-1990 1990-2000 2000-2005 2005-2009 1970-2009
M3 -0,16 0,37 0,78 0,82 6,44 0,62
M4 -0,41 0,18 0,34 0,78 3,37 0,30
M5 0,20 1,70 2,01 -0,14 7,42 0,72
Source: BBVA Foundation/Ivie and own elaboration
23. 23
INDEX
PUBLIC CAPITAL: MEASUREMENT ISSUES
TANGIBLE PUBLIC CAPITAL
Statistical Issues
Methodological Problems
PUBLIC INTANGIBLE CAPITAL.
SPINTAN FP 7 PROJECTFr)
24. MARKET INTANGIBLE CAPITAL
24
• Measuring intangibles.
• Seminal work: Corrado, Hulten & Sichel (2005, 2009): USA
They developed a proposal to expand NA boundaries to include a
selected group of intangible assets.
They develop a new model, including (some) intangibles as investment,
instead of following the NA practice of treating them as intermediate
consumption goods and services.
Following their proposal, “any use of resources that reduces current
consumption in order to increase it in the future […] qualifies as
investment”. Then, all types of capital should be treated symmetrically
(tangible & intangible).
25. 26
From the statistical side similar problems than for tangible capital
The computation of the user cost of capital for intangible assets can be
done by using an endogenous or exogenous rate of return for both, market
and non market
Alternatives:
•Ex-post rate of return computed only for tangible assets in the market
sector
• A selection of market rate of interest for different assets
• Financing costs of government projects (proxied by Government bonds)
• The social rate of time preference (SRTP)
• Others
Intangible Capital. Measurement Issues
26. 27
Intangible Capital. Measurement Issues
The social rate of time preference reflects the value that society attaches to
present, as opposed to future consumption while the remaining rates reflect the
opportunity cost for investment in the private sector.
𝑆𝑅𝑇𝑃 =
(1+𝑔) 𝑒
𝛱 𝑤 - 1
g = trend growth in real per capita household consumption;
e = captures the elasticity of marginal utility of consumption;
𝜫 = survival probability of an individual
W = degree of “selfishness” of present generations vis-à-vis future generations.
Given the requiered information, the rate of return of public capital can be
measured either as a weighted average of both types of opportunity costs
reflecting the fact that public spending could have crowded out both, private
investment and private consumption.
Figure 3 considers four alternatives: one endogenous and three exogenous.
28. 29
Table 4. Value of Capital Services. Non-Market Economy. Spain. Software
Differences from the endogenous M1 assumption
a) Levels (percentage over M1)
1970 1980 1990 2000 2005 2009
SRTP 0,90 0,89 0,92 0,85 0,89 1,15
M5 0,84 0,86 1,01 0,83 0,82 1,11
Average SRTP&M5 0,87 0,87 0,97 0,84 0,86 1,13
b) Average annual rates of growth (percentage points difference)
1970-1980 1980-1990 1990-2000 2000-2005 2005-2009 1970-2009
SRTP -0,15 0,36 -0,80 0,84 6,43 0,62
M5 0,20 1,70 -2,01 -0,14 7,42 0,72
Average SRTP&M5 0,02 1,04 -1,41 0,36 6,91 0,67
Source: BBVA Foundation/Ivie and own elaboration
29. 30
Conclusions
• Most of the methodological issues have their origin in the
difficulty to have crossed classified information by industries
and institutional sectors.
• Need to assure consistency between market and non-market
estimates:
– Same or different rates of return?
– Endogenous vs Exogenous?
• Until recently it could be argued that those were only
methodological issues without practical implications, but as
the results for last cycle has shown that they have also
practical implications.
• Thus, we need to come to a common view in SPINTAN
consistent with EUKLEMS and INTAN-Invest projects.
30. This project has received funding from the European Union’s Seventh Framework Programme for
research, technological development and demonstration under grant agreement No. 612774
PUBLIC CAPITAL
Measurement Issues
Matilde Mas (University of Valencia and Ivie)
SEM CONFERENCE
OECD, Paris, July 22nd-24th, 2015