Economic Measurement: Progress and Challenges
The development of the concepts and measurements of national income are among the most important achievements of modern economics. However, substantial improvements can and should be made in the traditional domain of the national accounts. The Commerce Department’s Bureau of Economic Analysis has made numerous improvements in recent years, including changing the focus from gross national product (GNP) to gross domestic product (GDP), chain weighting, using technically improved (Fisher Ideal) price and output indexes, adopting the system of national accounts (SNA) and initiating work on a variety of satellite accounts. In the postwar period, BEA has responded to the large structural changes in the economy, and the need for greater detail and frequency of estimates. Additional work should be done to improve measurement in a number of areas: the growth of hard-to-measure services, new products, quality improvements, technology and innovation, time use, international trade and capital flows, the impact of new firms, financial innovations, changes in the organization of production and distribution, capital accounts and demography, to name a few of the most important.