arklems

MEASURING ARGENTINA’S GDP MEASURING ARGENTINA’S GDP GROWTHGROWTH

Just Stilysed FactsJust Stilysed FactsAriel Coremberg-ARKLEMS+LAND-UBA

1st draft working paper This paper has been written as a tribute to Alberto Fracchia, recently died, a historic and well recognized expert on national accounts and statistics of

Argentina and Latin America. He was the founder of the National Accounts Bureau in Argentina, and expert of several Latin American countries. He transmitted me the “love” for numbers and economic series. After 2007, His pupils had to follow their careers outside the official institutions of Argentina

or in other countries.

1www.arklems.org

http://www.arklems.org/

OBJETIVO PROYECTO ARKLEMS+LAND UBAOBJETIVO PROYECTO ARKLEMS+LAND UBA

• Contraparte Argentina Academica Proyecto KLEMS coordinado desde U Harvard-Groningen

• Medicion Fuentes del Crecimiento, Productividad y Competitividad: Servicios de Capital: TIC´s, , Infraestuctura, Capital Humano, Factor Trabajo– Argentina: +RN: Tierra y Activos Subsuelo

3

OBJETIVE

• Measuring Argentina GDP GrowthMeasuring Argentina GDP Growthanalyze and discuss methodologies and analyze and discuss methodologies and

numbersnumbers

• We don‘t pretend judge: composition and We don‘t pretend judge: composition and sustainability of macroregimes in terms of sustainability of macroregimes in terms of other important variables: welfare, income other important variables: welfare, income distribution, employment, fiscal or distribution, employment, fiscal or competitivenesscompetitiveness

6

OBJETIVE

• We don’t measure the GDP we like: We don’t measure the GDP we like: joint output in agric.; productivity in joint output in agric.; productivity in services or quality change in outputservices or quality change in output

• Just Stylized Facts about Argentina Just Stylized Facts about Argentina GDP GROWTH trying to Reproduce GDP GROWTH trying to Reproduce GDP as traditional National GDP as traditional National Accounts Methodology 1993-2012Accounts Methodology 1993-2012

7

Main Methodological PointsMain Methodological Points• Revision of Quarterly GDP activity level from

supply side (also demand side) base year 1993 to review growth: period 1993-2012 by data published today from similar sources and series as cited in:

• Methodology see SNA Argentina (1999)

• This is not change base year, or GDP at current prices (or GDP per capita u$s)

8

• No es objetivo original del Proyecto ARKLEMS medir No es objetivo original del Proyecto ARKLEMS medir actividad económica mas allá que el modulo 1 actividad económica mas allá que el modulo 1 KLEMS implica la revisión de la medición del output KLEMS implica la revisión de la medición del output ajustada por cuestiones adicionales (tornquist, ajustada por cuestiones adicionales (tornquist, prod. en servicios, p. básicos, etc.)prod. en servicios, p. básicos, etc.)

• Pero es imprescindible revisión ante crisis Pero es imprescindible revisión ante crisis estadística para medir correctamente productividad estadística para medir correctamente productividad

• Nada sustituye el Resultado del Trabajo de una Nada sustituye el Resultado del Trabajo de una Oficina de Estadísticas Creíbles y Consistentes, con Oficina de Estadísticas Creíbles y Consistentes, con Capital Humano formado y acumulado en décadasCapital Humano formado y acumulado en décadas

9

STRUCTURE OF PAPER• LEMMAS AND CONTEXT

• BACKGROUND AND FRAMEWORK OF HISTORICAL NATIONAL ACCOUNTS OF ARGENTINA AND LAC

• MAIN RESULTS: LEVEL GAPS AND GROWTH GAPS: AGGREGATE AND BY INDUSTRY

• MYTHS, LEGENDS AND TYRANNY OF NUMBERS

– METHODOLOGICAL MYTH

– GROWTH ACCELERATION MYTH

– SUSTAINABLE GROWTH MYTH

– CHAMPIONSHIP OF LATINAMERICA MYTH

10

11

•EQUIPONDERACION:– CONSISTENCIA MODELOS PARA ANALISIS ECONOMICO

(Canavese) – CALIDAD Y CONSISTENCIA DATOS QUE LO VALIDAN (Fracchia)

•EL PIB NO ES UNA ESTADISTICA. ES EL AGREGADOR CONSISTENTE DE LOS DATOS O SERIES QUE LO VALIDAN

SISTEMA DE CUENTAS NACIONALES (2008) PARA MEDIR LOS PRINCIPALES VARIABLES Y AGREGADOS ECONOMICOS

•EL PIB ES LA PIEDRA FUNDAMENTAL DE LA MEDICION Y ANALISIS NO SOLO DEL CRECIMIENTO ECONOMICO SINO TAMBIEN DEL BIENESTAR

CONCLUSIONESCONCLUSIONES• Policy makers usually questioned official

figures of Inflation, Growth and Welfare during Recessions or Crises

• In Countries with Institutional and Congress and cross public opinion controls, policy makers (president but also congress) responses with creation of more research, more indexes, more statistics and academics reports pushing the limit of measurement

12

13

• GDP AND BEYOND: Policy makers questioned contra cyclicalOfficial Statistics during Bad years

• GDP doesn´t include all welfare concepts (health, education and quality outcome, human capital, culture, time use, household and other non-market activities, also inflation measured is different to inflationary perceptions of average households

• R. Kennedy (1968), Pension Funds crises (1985), Clinton (1990’s), Sarkosy (2008), Obama (2009)

• Responses of Policy Makers in Democracy: – Amplify the frontier of measurement. More CPI, WPI and U

indexes in USA. Changing of Law of Pension Funds– Boskin report – Stiglitz-Sen-Fitoussi Report. – Subjetive Well-being of Nations (2007) NTA vs NIA: A.B.

Krueger, Daniel Kahneman, David Schkade

– NEVER MANIPULATION ON EXISTING ECONOMIC SERIES AND STATISTICS

CONCLUSIONESCONCLUSIONES• Confronting Inflation in Argentina

• Instead of change the political economy or swap the bonds with another clauses, Argentina open the Pandora box of manipulation and

• Also Non-schumpeterian Destruction of Statistical System.

• Why alternative CPI and GDP could exists: because Argentina was the historical leader of the region in statistics.

• Argentine official GDP could not evade the so-called “Pandora Box” effects, caused by the political intervention of official statistics

14

ASPECTOS ASPECTOS METODOLOGICOSMETODOLOGICOS

15

ANTECEDENTES Y ANTECEDENTES Y EXPERIENCIA EXPERIENCIA ACUMULADAACUMULADA

Argentina y America Argentina y America LatinaLatina

16

Table A1: Main Background of National Accounts in Argentina

Date of publication Title Institution Base Year Period

1946 National Income of Argentina NAB-Central Bank 1935 1935-1945

1955 GDP and Income of ArgentinaSecretariat of Economic

Issues1950 1935-1954

1958 The Economic Development of Argentina ECLAC 1950 1900-1955

1964 GDP of Argentina NAB-Central Bank 1960 1950-1962

1964- 1968Income distribution and National Accounts of

ArgentinaCONADE-CEPAL (ECLAC) 1960 1950-1963

1966GDP origin and National Expenditure

CompositionNAB-Central Bank 1960 1950-1966

1971GDP origin and National Expenditure

CompositionNAB-Central Bank 1960 1950-1969

1975System of National Accounts and Income of

ArgentinaNAB-Central Bank 1960 1950-1973

1979- 1980 Quarterly estimations of supply and Demand NAB-Central Bank 1970 1970-1980

1991-1992Revision of National Accounts and Income

Distribution of ArgentinaECLAC

-PNUDBIRF1986 1980-1986

1996Revision of Quarterly estimations of supply

and DemandNAB-Ministry of Economy 1986 1980-1996

1999System of National Accounts, Base year

1993NAB-Ministry of Economy 1993 1993-1997

2000 Updated of supply and demand NAB-Ministry of Economy 1993 1998-1999

2001 Input Output Matrix 1997NAB-Ministry of Economy-

INDEC1993 1997

17

BACKGROUND AND FRAMEWORK OF HISTORICAL NATIONAL BACKGROUND AND FRAMEWORK OF HISTORICAL NATIONAL ACCOUNTS OF ARGENTINA AND LACACCOUNTS OF ARGENTINA AND LAC

18

20

• OLD METHODS (FIX LASPEYRES INDEX)

• OLD BASE YEAR

• 2004 ECONOMIC CENSUS OLD

• CAPTURE OF SUBTERRANEAN, INFORMAL AND BLACK ECONOMY OLD

• BUT NEITHER OF THIS PROBLEMS IS KEY IN ORDER TO MEASURE PRESENT GDP DEBATE, NO CPI MANIPULATIOM (ONLY SMALL SHARE)

• Analogy with CPI banal debate: inflation measurement problem is not related with plutocratic effects, weights, biased avergare level prices comes from different zones (urban vs rural, middle class neighborhood vs poor zones) or commercial type (“supermarkets vs chinostores”. Are the prices supposely surveyed.

• GARBAGGE IN, GARBAGGE OUTGARBAGGE IN, GARBAGGE OUT

Main Methodological PointsMain Methodological Points• Traditional approach of quarterly GDP

estimation from supply side in Argentina

– Exhaustiveness, representativeness and Consistent Criteria: capture the output volume by representative indicators

– Not all Surveys have enough representation of the global output by industry

– V.I. obtained through Deflated Values from Surveys could be distorted under High Inflation

21

Main Methodological PointsMain Methodological Points• Most of Sectors ‘ve been traditionally

measured through representative volume index indicators (chambers, official institutions), – avoiding non-representativeness of surveys

and high inflation distortion problem

• Only Financial Intermediation depends on CPI deflator

22

Main Methodological PointsMain Methodological Points• Commodity Flow: Trade, Cargo Transport through

IO coef. by industry

• Intermediate input demand: f.ex.wearing apparel; dressing

• Demand functions in some services: restaurants, non-regular passengers transport (from 2002 only income elasticity)

• Non-Market services by employment indicators: education, health, public administration, other services

23

Main Methodological PointsMain Methodological Points• Try to reproduce GDP volume index at 93

prices as SNA Ar, not the desire GDP: vrg. ex. Productivity of services or quality changes of outputs

• Taking into account these traditional methodology and similar data sources as SNA Ar (1999) with published series today at very high detail level (4-5 ISIC digit rev.3) from 1993 to test the reproduction and correlation of Activity Level with official figures without any econometric imputation

24

PRINCIPALES PRINCIPALES RESULTADOSRESULTADOS

25

2007-2012: 15,9% vs 29,4%

27

MYTH 1: LEVEL GAP DUE TO MYTH 1: LEVEL GAP DUE TO CPICPI. NO!. NO!

Industry Contribution to Argentina GDP gap (ratio between Official GDP and ARKLEMS reproducible GDP 2012 level -total GDP 2007-2012 Gap level=100% (12.2%).

31

• FACTS: WRONG!. FACTS: WRONG!. • INDUSTRY CONTRIBUTION TO LEVEL INDUSTRY CONTRIBUTION TO LEVEL GAP BY SECTOR POINT THAT THERE IS GAP BY SECTOR POINT THAT THERE IS

ABANDONMENT OF TRADITIONAL ABANDONMENT OF TRADITIONAL METHOD AND SOURCES of GDP growth METHOD AND SOURCES of GDP growth

(SNAar (1999)) base 93(SNAar (1999)) base 93

MYTH 1: LEVEL GAP DUE TO CPI: MYTH 1: LEVEL GAP DUE TO CPI: NO!!!!!NO!!!!!

32

33

• The main difference is due to having withdrawn the The main difference is due to having withdrawn the traditional methodology that National Accounts of traditional methodology that National Accounts of Argentina (Nar) for Quaterly GDP activity level 1993 Argentina (Nar) for Quaterly GDP activity level 1993 base year (SNAar1999) . base year (SNAar1999) .

• A Great Part Of Methodology and Sources of A Great Part Of Methodology and Sources of Traditional Nar are VOLUME INDICATORS that could Traditional Nar are VOLUME INDICATORS that could obtain because are published and comes from several obtain because are published and comes from several institutions and chambers (See SNAar99)institutions and chambers (See SNAar99)

MYTH 2: growth acceleration but MYTH 2: growth acceleration but Crecimiento Ma Non TroppoCrecimiento Ma Non Troppo

• Recuperacion-Crecimiento-Desarrollo

• Recovery: NBER (Burns-Mitchell-Heymann-Coremberg)

• Growth Acceleration (Hausmann-Rodrik-Prichett-Rostow)

• Crecimiento Continuo y Sostenido: Entre Max Ciclicos e intensivo en Productividad

34

MYTH 2: GROWTH MYTH 2: GROWTH ACCELERATION-CHINESE RATESACCELERATION-CHINESE RATES• Per Capita growth: g• gt+n >3.5 ppa → Growth is rapid

• gt+n >2.0 ppa → Growth accelerates

• yt+n > max(yi), i≤t → Post growth output exceeds pre episode peak

• Relevant time horizon is eight years (i.e., n = 7)

35

MYTH 2: GROWTH MYTH 2: GROWTH ACCELERATION-CHINESE RATESACCELERATION-CHINESE RATES

Table 1: Argentina GDP growth-1993 prices-

ARKLEMS OFFICIAL

1990-1998

Accumulated Growth 56,3% 56,3%

Annual Growth 5,7% 5,7%

2002-2012



2002-2007



2007-2012

Accumulated Growth 15,9% 29,4%Annual Growth 3,0% 5,3%

1998-2012


Annual Growth 2,5% 3.4%

36

MYTH 2: GROWTH ACCELERATION-MYTH 2: GROWTH ACCELERATION-CHINESE RATESCHINESE RATES

• FACTS: NO SUSTAINABLE FACTS: NO SUSTAINABLE GROWTH ACCELERATIONGROWTH ACCELERATION

• Because Not Clauses H-R-P: 1, 2 Because Not Clauses H-R-P: 1, 2 And 4. And 4.

• g annual:1990-1998 g annual:1990-1998 2002-2012 2002-2012

38

MYTH 3 MYTH 3 BEST GROWTH PATTERN BEST GROWTH PATTERN OF ARGENTINA HISTORYOF ARGENTINA HISTORY

STRUCTURAL CHANGE STRUCTURAL CHANGE GROWTH PATTERN GROWTH PATTERN

(MACRO NUMBER)

48

ILUSION DURANTE Y DESENCANTO ILUSION DURANTE Y DESENCANTO EX-POST DE LA SOCIEDAD EX-POST DE LA SOCIEDAD

ARGENTINA CON LOS PERIODOS DE ARGENTINA CON LOS PERIODOS DE CRECIMIENTO ECONOMICOCRECIMIENTO ECONOMICO

OBJETIVO: Obtener una serie única de Crecimiento PBI que OBJETIVO: Obtener una serie única de Crecimiento PBI que permita analizar los diversos Reg. Macroeconomicos.permita analizar los diversos Reg. Macroeconomicos.

No se pretende juzgar la composición y sostenibilidad de los reg No se pretende juzgar la composición y sostenibilidad de los reg macro y su crecimiento en términos de Competitividad y macro y su crecimiento en términos de Competitividad y

Sostenibilidad SocialSostenibilidad Social

49

MYTH 3: STRUCTURAL CHANGE MYTH 3: STRUCTURAL CHANGE GROWTH PATTERN: GROWTH PATTERN: (MACRO (MACRO NUMBER) and Best Growth Pattern of NUMBER) and Best Growth Pattern of

Argentina during last 100 yearsArgentina during last 100 years

53

Source: ARKLEMS and ECLAC

MYTH 4: ARGENTINA WAS THE GROWTH MYTH 4: ARGENTINA WAS THE GROWTH CHAMPIONSHIP OF THE REGION: CHAMPIONSHIP OF THE REGION: NO!NO!

Figure 4: Latin America GDP Growth, 2002-2012 (compound rate, %)

62

11,41

9,54

9,34

8,76

7,28

6,41

6,83

2,76

-2,86

-8,12

-17,69

-18,36

-20 -15 -10 -5 0 5 10 15

Méjico

Chile

Perú

Brasil

Bolivia

Latinamerica

Ecuador

Colombia

Paraguay

Venezuela

Uruguay

Argentina

LatinamericaGDP Growth 1998-2002 (%)

MYTH 4: ARGENTINA WAS THE GROWTH MYTH 4: ARGENTINA WAS THE GROWTH CHAMPIONSHIP OF THE REGION: NO!CHAMPIONSHIP OF THE REGION: NO!

63

MYTH 4: ARGENTINA WAS THE GROWTH MYTH 4: ARGENTINA WAS THE GROWTH CHAMPIONSHIP OF THE REGION: NO!CHAMPIONSHIP OF THE REGION: NO!

Figure 5: Latin America GDP Growth, 1998-2012 (compound rate, %)

64

MYTH 4: ARGENTINA WAS THE GROWTH MYTH 4: ARGENTINA WAS THE GROWTH CHAMPIONSHIP OF THE REGIONCHAMPIONSHIP OF THE REGION

65

CONCLUSIONESCONCLUSIONES

66


• ARKLEMS reproducible showed a slower growth than official series. But contrary to several myths, the gap is not related with deflation with distort prices index, directly linked with the abandon of traditional methodology followed by argentinean national accounts.

67


• The paper showed that while Argentina growth was important during recent growth episode, similar to period 1990-1998; and it was not the growth championship of Latin America.

70

CONCLUSIONESCONCLUSIONES• Long run growth: 1998-2012: 2,4%

• Argentina grew less than Brazil and LAC.

• Little bit less than Historical Trend: 1913-2012: 2,8%

71


• Importancia no solo del Crecimiento Sostenido, sino de otro concepto olvidado: Crecimiento Continuado –Baja Volatilidad

72

CONCLUSIONESCONCLUSIONES• Why alternative CPI and GDP could exists:

because Argentina was the historical leader of the region in statistics.

• Argentine official GDP could not evade the so-called “Pandora Box” effects, caused by the political intervention of official statistics

73

MUCHAS GRACIASMUCHAS GRACIAS

75

arklems

Documents

Transcript of arklems