Upload
eleanor-melton
View
217
Download
0
Embed Size (px)
Citation preview
The Overview of GDP Estimates and Related Issues in China
Discussant commentsSession: Recent Developments in the NBS (I) Tuesday, December 1, 2009
Kim ZieschangIMF Statistics Department
The 13th OECD-NBS Workshop on National Accounts
Haikou, ChinaNovember 30-December 4, 2009
The views herein are those of the author and should not be attributed to the IMF, its Executive board, or its management
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
2
Institutional units versus activity units
NBS question 1: How can data on activity units be collected if sources provide information only on institutional units (i.e., enterprises rather than establishments) Sample surveys of enterprises identifying
the establishments they own? Single physical location, producing one or a few
types of output
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
3
Owner occupied housing services output
NBS question 2: How should depreciation be calculated for owner occupied housing? Output is the aggregate depreciation of
the owner occupied housing stock Volume of output proportional to area of
dwellings Price index proportional to depreciation
per unit area of dwellings
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
4
Owner occupied housing services output
Restatement: How should rentals be calculated for owner occupied housing? Two approaches Rental equivalence User cost of capital
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
5
Owner occupied housing services output
Rental equivalence Equivalent rents for types of owner
occupied units my be hard to find in a given market area, so, alternatively use
User cost of capital Depreciation Plus interest cost of invested funds Minus expected appreciation in the prices
of owner occupied dwellings
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
6
Owner occupied housing services output
User cost of capital, continued If the user cost method is followed, using only
depreciation is equivalent to saying that the interest cost of invested funds less expected appreciation (the real interest rate) is zero Overstates current price output level if real interest
rate is negative Understates current price output level if real interest
rate is positive Overstates current price output growth if real interest
rate is falling Understates current price output growth if real interest
rate is rising
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
7
Owner occupied housing services output These are primarily housing price rather than
volume effects Output volume growth is fundamentally the
weighted average increase in the aggregate area (size) of the housing stock, controlling for the mix of types of unit It is important that housing stratified by type of unit Weighting of growth in certain types of housing is
important to the accuracy of the estimate of total volume growth in owner occupied housing services
The rental estimate is important to these weights whether by equivalent rent or user cost
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
8
Real estate development
NBS question 3: Financial statements of real estate development companies do not strictly reference activity from the current period, but also include activity from past periods Have I got the problem correctly stated? Further explanation of the problem with
the data?
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
9
Some further observations: FISIM output at current prices
NBS approach to financial intermediation services indirectly measured (FISIM) Loans:
loan interest receivable – reference rate annual average value of loans
Deposits: reference rate annual average value of deposits – deposit interest payable
Reference rate = (deposit rate + loan rate – risk premium)/2
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
10
Some further observations: FISIM output at current prices
Comment Reasonable approach which allows the average term
structure of loans relative to deposits to affect the allocation of FISIM between loans and deposits Loan rate minus risk premium differs from deposit rate
because of difference in maturity of loans versus maturity or duration of deposits, among other things
The risk premium stays in FISIM as compensation for risk bearing Most of the risk bearing charge probably covers the
equivalent value of insurance against term and loan default risk
The rest of the risk bearing charge is paid to the stockholders for bearing risk as a primary input service
The amount of the risk premium to be included in FISIM is currently under discussion in the ISWGNA as part of the 2008 SNA Research Agenda
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
11
Some further observations: FISIM output at current prices
Loans rate Reference premiumRisk rate Bond
Loans 2/rate Bond rateDeposit premiumRisk rate Bond
Loans 2/premiumRisk premiumRisk rate Bond rateDeposit
premiumRisk maturity) (same rate Bond t)(Governmen
Loans 2/premiumRisk rateLoan rateDeposit rateLoan
Loans rate Reference rateLoan
FISIMloan NBS
… so NBS loan FISIM fully reflects the risk premium because the reference rate is effectively risk free. Paragraph 6.166 of the 2008 SNA is somewhat ambiguous about whether risk is in or out of the reference rate. The 2008 SNA Research Agenda will aim to clarify this.
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
12
Some further observations: FISIM output at current prices
Questions How is the loan risk premium estimated? Should FISIM for loans be calculated on
the market or fair value of loans rather than the contract value (which is the SNA’s valuation of loans on the balance sheet)
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
13
Some further observations: FISIM output price and volume
NBS FISIM price index: the unweighted average of the interest rate index for deposits maturing in 1 year and the interest rate index for loans maturing in 1 year A “reference rate” index?
Weight of FISIM in NBS estimate of total financial services output is proportional to net interest receivable
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
14
Some further observations: FISIM output price and volume
Question: is this consistent with the current price value of FISIM? Could average of index of the reference rate minus the
deposit rate and index of the loan rate minus the reference rate be used instead of the average of indices of deposit and loan interest rates?
Could the weight of FISIM be FISIM rather than net interest receivable? FISIM is close to net interest receivable on loans and
deposits if total loans are close to total deposits, but the difference increases with total loans minus total deposits
Could interest rates and FISIM calculations for more maturities than one year be considered?
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
15
Some further observations: FISIM output price and volume
Question: Should the FISIM deflator not only depend on interest rates but also include either Average deposit size and average loan size?
Implication: output is a weighted average of the number of deposit accounts and number of loan accounts
Or, a general price index, such as the consumption and capital formation deflator used for “other financial services?”
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
16
Some further observations: FISIM output price and volume
.preferably
Tornqvistor idealFisher :used be could Laspeyres besides indices priceOther
index. price general aor e)(fair valu sizeloan average theis and
index price general aor sizedeposit average theis where
rate ReferencerateLoan
rate ReferencerateLoan
FISIM Total
loans FISIM
rateDeposit rate Reference
rateDeposit rate Reference
FISIM Total
deposits FISIM
index price Laspeyres FISIM
,1
,1
,1111
1
,1111
1
ttLoan
ttDeposit
ttLoantt
tt
t
t
ttDeposittt
tt
t
t
P
P
P
P
December 1, 2009 Discussion: Overview of GDP Estimates and Related Issues in China
17
In closing
Thank you for the opportunity to learn about China’s national accounts and to offer some approaches to the methodological and data problems NBS faces in compiling them