Marrying the cook

Understanding National Accounts
Ever wonder what marriage and cooks have to do with economic growth? The OECD has the answer. The organisation’s publications are stocked in university libraries around the world, but it has rarely produced a textbook. Yet, questions are often asked about how national accounts are calculated.
For instance, what exactly is gross domestic product and how is it different to gross national income? Or how can what appears to be a positive foreign balance have a negative effect on the rate of GDP growth? Understanding National Accounts is one of the first OECD publications written to answer questions like these, and explicitly as a textbook.The reader, whether student or browser, can learn how to distinguish between volume and price increases, understand what productivity figures include and exclude; discover growth rates and savings ratios, purchasing power parities and household spending accounts; and grapple with the principle of quadruple-entry bookkeeping. Each chapter finishes with exercises and, in a novel stroke of teaching interactivity, the answers are found not in the book, but online! Special chapters include information on the Maastricht Treaty criteria for European economic and monetary union, the treatment of value-added tax pension funds and social security plans, as well as an examination of the national accounts of the US, India and China.Understanding National Accounts is a lively, user-friendly textbook. In one lesson, GDP calculations are illuminated by using the real life example of a pasta manufacturer. This is where the cook comes in. While discussing the underground economy and the uncalculated production values of household cooking, cleaning and caretaking, the authors recall a remark by John Hicks, a leading light of national accounts, that marrying one’s cook would reduce GDP.Such stories as this are the spirit of this book. Enrico Giovannini, head of the OECD statistics directorate, explains that all too often statistics are seen as a necessary but very dry subject and the preserve of specialists: “The book allows non-specialists to understand the ‘religion of national accounts’ and demystify this esoteric group of statistical priests.” References:
ISBN-13 9789264025660©OECD Observer N° 260, March 2007

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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