The National Accounts constitute an integrated system of macroeconomic accounts. These seek to reflect the most relevant aspects of a country's economy.
The main objective of the national accounts is to present, in a summarized and coherent way, the production, consumption and accumulation flows that occur in a country. All this, during a certain period of time.
Likewise, these accounts reflect how it is produced (cost structure) and the structural changes that can occur in the economy. For example, a relevant change in production technology.
Components of the national accounts
National accounts are guided by a set of accounting definitions, concepts, classifications and standards that are widely accepted at the international level (that is, they are accepted and used by a large group of countries).
The main components are:
- Activities and transactions: Activities are production, consumption and accumulation. Transactions meanwhile, refer to the exchange or interaction that occurs between two or more agents of the economy.
- Institutional sectors of the economy: They are households and legal entities.
- Accounts: Current and accumulation accounts. They record the production, use and accumulation of goods and services.
- Balance sheets: They present the value of the stocks of assets and liabilities.
- Supply and use tables: They present in a summarized way how production is distributed among the various uses (including accumulation)
It should be mentioned that it is not possible to measure economic flows with total accuracy due to the lack of information and / or because it would be very expensive to make a detailed measurement. Given the above, these accounts are an estimate and therefore, it is very relevant that the methodology used is rigorous and is under constant review.
What are national accounts used for?
National accounts have various uses, among which the following stand out:
- Monitoring the economy: The aggregates of the nation accounts allow a summary of a large volume of information to be observed, thus facilitating the analysis of the behavior and evolution of a country's economy. Thus, for example, economic aggregates such as GDP or GNP that are part of the national accounts are widely used to measure the development of a country and estimate the level of well-being that its citizens can achieve.
- Macroeconomic analysis: National accounts can be used to study and analyze the mechanisms that operate in the economy. For example, how investment growth affects the future development of a country.
- International comparisons: Since the national accounts constitute a standardized and accepted system, it is feasible to make comparisons of the economic aggregates of different countries. If each country used its own measurement system, comparison would be almost impossible.
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