Mismeasuring Long Run Growth. The Bias from Spliced National Accounts

Arbeitspapier

Comparisons of economic performance over space and time largely depend on how statistical evidence from national accounts and historical estimates are spliced. To allow for changes in relative prices, GDP benchmark years in national accounts are periodically replaced with new and more recent ones. Thus, a homogeneous long-run GDP series requires linking different temporal segments of national accounts. The choice of the splicing procedure may result in substantial differences in GDP levels and growth, particularly as an economy undergoes deep structural transformation. An inadequate splicing may result in a serious bias in the measurement of GDP levels and growth rates. Alternative splicing solutions are discussed in this paper for the particular case of Spain, a fast growing country in the second half of the twentieth century. It is concluded that the usual linking procedure, retropolation, has serious flows as it tends to bias GDP levels upwards and, consequently, to underestimate growth rates, especially for developing countries experiencing structural change. An alternative interpolation procedure is proposed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EHES Working Papers in Economic History ; No. 60

Classification and Topics

• Classification: Wirtschaft ; Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access ; Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts ; Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: Pre-1913 ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
• Subject: growth measurement ; splicing GDP ; historical national accounts ; Spain

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Prados de la Escosura, Leandro
• Event: Veröffentlichung
• (who): European Historical Economics Society (EHES)
• (where): s.l.
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/246991
• Last update: 10.03.2025, 11:43 AM CET