Measurement of distribution and redistribution of income with national accounts

Santos, Susana

http://hdl.handle.net/10400.5/102280

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Authors

Santos, Susana

Abstract(s)

The contribution of Richard Stone (1913-1991) to the development of national accounts, awarded him with the Nobel Prize in Economics in 1984. In the scope of the first versions of the system of national accounts (SNA), conceived under his chairmanship, his attention was mainly focused on the production and consumption of goods and services. However, the distribution and redistribution of income was also addressed by him, in a way that, from our point of view, continues to make sense. This perception motivated its adoption as the basis for the interpretation and adaptation to the latest versions of the SNA, now presented. Thus, after the measurement of the income generated in the production of goods and services and its distribution through the institutional sectors, a chain of redistribution is developed into four rounds. The description, accompanied by a numerical example, involves the so-called distributive transactions of the national accounts and ends with the identification of the institutional sectors’ use of income in goods, services and non-produced non-financial assets. A possible approach based on a so-called social accounting matrix (SAM) is also briefly presented, as a possible tool to measure and model the economic activity of a country, with emphasis on our topic. This is, in turn, an interpretation and adaption of the approaches of Graham Pyatt (1936-2023) and his associates.