BEA’s strategic plan for 2001-2005

BEA’s strategic plan for 2001-2005

BEA published a preliminary strategic plan in the December 2001 SURVEY OF CURRENT BUSINESS and invited public comment. The plan, which incorporated suggestions from BEA’s customers, staff, and partner statistical agencies, presented the elements of BEA’s planned work and initiatives through 2005. As development of the preliminary strategic plan neared completion, Secretary of Commerce Donald E. Evans and Secretary of Treasury Paul H. O’Neill asked BEA to convene experts in the fields of economics and business and solicit their opinions and insights on the expansions and improvements to the national accounts necessary for capturing the changing economy. Participants in that meeting, held in November, 2001, included members of the Administration and other Federal Government and private-sector experts. The private-sector experts comprised the members of BEA’s Advisory Committee–distinguished economists and business people–and two invited guests, both distinguished economists.

Abstracts of the comments of those attending the meeting follow. They begin with Commerce Under Secretary for Economic Affairs Kathleen Cooper’s introductory remarks and end with BEA Advisory Committee Chair Professor William Nordhaus’s overview of targets for developing and broadening the national accounts. The comments reprinted here range from specific suggestions for improvements in the accounts to broad suggestions for recasting and expanding the accounts.

The revised plan is presented here, beginning on page 20, in table form by national economic account. The table summarizes each component of the plan and provides milestones through 2005 that serve as checks on progress toward the stated goals.

The strategic plan will be updated later this year to add milestones for FY 2006 and to reflect changes in priorities and opportunities. The activities listed in the revised table and the timing of the milestones are based on the assumption that BEA will receive adequate budget funding for each of those years.

I would like to thank the members of the BEA Advisory Committee and the expert commentators and the customers and other respondents for their valuable contributions to the refinement and further development of BEA’s strategic plan.

J. Steven Landefeld Director, Bureau of Economic Analysis

Kathleen B. Cooper

Under Secretary for Economic Affairs, U.S. Department of Commerce

I want to thank each of you for your attendance today. One of the pleasures of public service is to be able to draw on the thinking of such a distinguished group of economists for their insights-members of the Bureau of Economic Analysis advisory committee and special guests for this brainstorming session, Marina Whitman and Robert Hall. Let me also welcome and acknowledge Richard Clarida from the Treasury Department and Randy Kroszner from the CEA, who will share their perspectives with us. I must thank as well Lawrence Slifman from the Federal Reserve for joining us and for providing input on behalf of the Federal Reserve.

This is a brainstorming session, not a place for speeches. We would appreciate your expert evaluation on the design and composition of the national income and product accounts. Secretary Evans, Deputy Secretary Bodman, and I are committed to working with you to ensure that our national accounts meet the high standards demanded by today’s economy.

During today’s session, Richard Clarida will report to you that Treasury Secretary O’Neill shares these goals. Steve Landefeld, the Director of the Bureau of Economic Analysis, and I expect this session to be the first of several and hope you can participate throughout and share your recommendations to help guide our future work on the national accounts.

We have already begun a number of important changes here at BEA to improve the national accounts. Working closely with the President and the Congress, we received funding to begin the important task of upgrading the GDP to improve our measures on important sectors of the economy, including the impact of IT and telecommunications, pharmaceuticals, financial derivatives, and various forms of compensation. In addition, BEA took initial steps to address long-overdue and urgently-needed improvements to the reliability of its GDP processing system, while at the same time developing and beginning to implement a comprehensive plan to improve its performance. Other changes over the past year have been important first steps in providing electronic filing for respondents to BEA surveys and easier and expanded access to BEA,s Web site through interactive and easily downloadable data sets, which has been widely praised by data users.

In the upcoming year, BEA, with the support of the Administration, will be working on a number of initiatives to improve the quality and timeliness of economic statistics. Your contributions today will be important in fleshing out these activities. Indeed, BEA has made excellent strides in updating its strategic plan. What we learn from you will help us put the finishing touches on it.

Somewhere down the line in this process of improvement in the accounts lies the hard work of finding the financial resources for new initiatives, but that is not the business of today. Again, I thank you for accepting our invitation today and look forward to hearing your thoughts on this important topic.

Richard H. Clarida

Assistant Secretary for Economic Policy, U.S. Department of Treasury

The goals of the Bureau of Economic Analysis and the Treasury Department with regard to the national income and product accounts are broadly the same. We share a desire for the most accurate, detailed, and timely reporting possible of economic activity. BEA has long been recognized as the world leader in the field of statistical measurement of the economy. We wholeheartedly support BEA’s continuing efforts to improve the accounts.

Secretary of Treasury Paul O’Neill has expressed a special interest in this endeavor. As the result of his experience as Chairman and CEO of Alcoa and President of International Paper, he believes that, to the extent possible, policymakers should have ready access to “real-time” data on the economy on an aggregate and sector-by-sector basis. The availability of more timely statistics–sensitive to subtle changes in the economic climate–would enhance the decision-making ability of policy officials. The Secretary has directed Economic Policy (EP) to investigate new frameworks for organizing and interpreting economic information. These efforts have already resulted in improvements in the way EP presents and interprets the vast array of weekly and monthly indicators on the economy that are produced by BEA and other government agencies. The Treasury is also interested in encouraging efforts, such as those featured in a recent Staff Research Study Number 26 by the International Trade Commission (ITC), to assemble and organize information on the global commercial activity of U.S. multinational firms. The goal here is to make available in a timely and useful fashion, data on direct investment receipts and payments derived from sales made by foreign affiliates. This information, in conjunction with the data already provided on cross-border trade, would, in the words of the ITC report (pages 1-8) “provide a more complete perspective on how U.S. firms are faring in global markets, irrespective of their chosen mode of delivery.”

The U.S. statistical system has been without peer in its ability to respond to changing economic conditions and the statisticians at BEA are to be commended for their leadership in introducing innovative new measurement techniques. But world business activity is changing even more quickly. We look forward to working with you to find the best ways to capture new developments.

Lawrence Slifman

Associate Director, Division of Research and Statistics, Federal Reserve Board

It has been our experience at the Federal Reserve Board in putting together our estimates of industrial production and capacity utilization that much of what needs to be done to improve our estimates can only be done by the statisticians equivalent of house-to-house combat–that is, improving our measures one detailed item at a time. I think that many of my comments on BEA’s Strategic Plan fall into this category. Of course, for BEA the task is even more difficult because it must rely, to some extent, on a complementary “house-to-house” effort at the Census Bureau that would provide BEA with more detailed data from its economic programs on a more timely basis. Finally, I recognize that adopting my suggestions will not be costless; without additional funding for BEA and the economics programs at Census, implementation of my high priority items might well displace someone else’s high priority items. That said, let me proceed with my wish list.

The fundamental conceptual and statistical building block of the national income and product accounts (NIPA’s) is the input-output system and related items (for example, commodity and capital flow tables). It takes about 5 years from the time the quinquennial economic censuses are conducted until the input-output (I-O) system is rebenchmarked. Consequently, in November 2001, the national accounts were still based on estimates of the structure of the economy as it existed in 1992. Obviously, the structure of the economy has changed dramatically since 1992. If the accounts are to adequately portray the nature of economic activity currently, it is critical that the Census Bureau provide BEA more promptly with the data it needs to rebenchmark the I-O system and that once BEA has the data, it should proceed with rebenchmarking as quickly as possible.

Closely related to the I-O program at BEA is the work on measures of output by industry. As noted below, I would like to see a number of improvements to the measurement of the information technology (IT) sector. But in the context of the industry accounts, it would be extremely helpful to economic analysts to have more detail on IT industries–that is, at a finer level of disaggregation.

BEA already has a number of specific improvements to the accounts that are in train or have been proposed. Let me note a few that I think should be given high priority.

* Improvement of price measures, especially prices of services where the nature of the output is not easily defined, such as financial services and medical services.

* Develop data sources that will eliminate (or at least reduce) the reliance on trends for quarterly estimates of PCE services.

* Improve the measures of stock options and other types of variable pay.

* Continue the effort to achieve better integration of the NIPA’s and the flow of funds accounts.

Related to some of the proposals in BEA’s Strategic Plan is the issue of the Taxpayer Compliance Measurement Program (TCMP). The last time the IRS conducted TCMP audits was in the late 1980s. A new TCMP could potentially be extremely helpful in reconciling income and spending measures of GDP and in understanding other anomalies in the national accounts.

With regard to the IT sector, there are several areas where more work could be done both at the Census Bureau and at BEA.

* It would be very useful to researchers and BEA if the Census Bureau collected and published on a monthly basis data on the orders, shipments, and inventories of IT-equipment manufacturers at a finer level of disaggregation. For example, currently the monthly Census report gives information for manufacturers of communications equipment and semiconductors at the four-digit NAICS level, compared with the six-digit level for motor vehicles.

* Data sources should be developed that will help BEA do a better job at splitting sales of PCs among purchases by consumers, businesses, and governments.

* BEA needs to continue to do more work on developing appropriate deflators for a wider variety of IT equipment.

* The strategic plan calls for improving BEA’s measures of depreciation for IT equipment. This initiative is extremely important and should be given high priority.

I’ll conclude with a comment on the presentation of NIPA information. Currently, BEA produces a sector table for motor vehicle output quarterly and tables for farm and housing output annually. It would be helpful for many types of analysis to have more sector tables and to have them at a quarterly frequency. Examples include the energy and aircraft sectors and, perhaps, the insurance and pension sectors.

Randall S. Kroszner

Member, Council of Economic Advisers

Improving the reliability and timeliness of Federal statistics is an important and essential function of the Bureau of Economic Analysis, and the Council of Economic Advisers lauds their efforts. Recent economic developments underscore the importance of high-quality economic statistics. The economic slowdown this year–especially in the aftermath of the terrorist attacks on September 11–significantly altered the economic environment facing the Administration. Having high-quality data has been critical to designing appropriate policies to address the new challenges.

There is, of course, plenty of room for further improvement. One notable sign of a problem in our Federal statistics was this year’s sizable GDP annual revision, which highlighted the need to collect data more frequently on the software industry. Another sign has been the large and growing statistical discrepancy between the output and income measures of GDP. The discrepancy indicates that the accuracy in measuring aggregate economic activity is deteriorating. This partly reflects the fact that the input-output tables–upon which GDP statistics are constructed–have become increasingly out-of-date and raise important questions about the accuracy of industry estimates of economic activity.

A key challenge facing BEA, and other statistical agencies, is to determine how best to continue to improve our Federal statistics in an environment of tight budget constraints. There might be, of course, several ways for BEA to proceed, but let me mention a few that deserve particular attention. One way is to be more selective in the choice of data to collect, process, and disseminate. There is already a priority in our Federal statistical programs to streamline existing programs, and considerable progress has been made over the years. BEA might consider taking a more aggressive approach to replacing existing, low-priority statistics programs with new programs aimed at better measurement of emerging economic trends.

Another way is to focus on increasing the efficiency of existing programs in order to stretch scarce budget dollars further. One possible initiative to achieve greater efficiency is to promote data sharing among Federal statistical agencies. It also has the potential to reduce reporting burdens on the public and improve the quality of the statistics for policymakers as well as researchers. For example, if even limited data sharing among BEA, Census, and BLS were allowed, BEA might be able to better integrate labor, capital, and output data, thereby providing a more accurate measurement of economic activity and a better understanding of how the economy works. I would be interested in hearing from others about concrete benefits to BEA from enhanced data sharing.

Currently, however, statutory barriers generally prevent statistical agencies from sharing data they collect with other agencies (especially for data production purposes), and new legislation would be required to enhance access across agencies. It should be noted that some of these barriers have played an important role in safeguarding the privacy of survey respondents because there are very different confidentiality standards under which various Federal statistical agencies operate. Hence, any expansion of data sharing powers would likely have to be coordinated with changes in confidentiality standards.

A good way to make progress on data sharing is to build on the previous efforts. The Statistical Efficiency Act of 1999 is a good example of the types of reforms that should be considered. The Act included enhanced data sharing among Federal statistical agencies and also strengthened confidentiality provisions to safeguard the privacy of survey respondents. It is important to note that the House passed the Act in a bipartisan fashion, but it stalled in the Senate.

BEA should also continue to seek opportunities to partner with the private sector in order to boost efficiencies. To be sure, the private sector could help collect data and even help to process and disseminate it. For example, retail chains have extensive computer tracking systems for real-time purchases–a wealth of untapped data on consumer spending patterns. And high-tech firms have excellent information on inventories, sales, and prices, which could help to provide a better snapshot of innovations that are driving the “new economy.” The key issue is how can a partnership be structured so that it does not compromise the high quality of Federal statistics that we have come to expect: How difficult would it be for BEA and other statistical agencies to set standards and oversee the data collection efforts of the private sector? Is it possible to carefully design safeguards to ensure privacy and confidentiality? Can contractual obligations be enforced to guarantee that private sector partners would maintain the quality and comparability of the data over time? Would partnering with the private sector allow Federal statistical agencies to respond more flexibly to structural changes in the economy? What cost advantages might arise from such partnerships?

Robert E. Hall

Robert and Carole McNeil Joint Professor of Economics, Stanford University, and Chair of the NBER Business Cycle Dating Committee

I appreciate the opportunity to represent the National Bureau of Economic Research (NBER) at this session on the future of the accounts. Let me begin by reacting to some of the various suggestions that other panel members have provided. First, it’s an interesting question as to the value of a monthly estimate of GDP. I know that from my perspective, as Chair of the NBER Business Cycle Dating Committee, we are uncertain about how we might use a monthly estimate of GDP in our work. The current recession has made us think more than before about the relative importance of employment and output. In past recessions, the two have moved together, because productivity remained constant or fell during the recession. With the continuation of rapid productivity growth during the current recession, we find a mild contraction in output (quarterly GDP) with a normal contraction in employment. Monthly GDP would assist in determining peak and trough dates, especially to those whose definitions of recessions emphasize output. I personally (not as Chair) tend to emphasize employment, so quarterly GDP would play a fairly small role in my personal chronology.

Among the agenda of items that BEA is considering, I suggest that further work on software should be a priority. The new economy has been propelled by general-purpose technology that is very flexible and includes both hardware and software. Rapid speed of innovation is a characteristic of the new economy. You can build an application on Oracle in 3 days that would have taken months in the 1980s. Wal-Mart, with one million-plus employees, owes its success to general-purpose technologies, but its contributions are not yet fully measured.

In pursuing this further work on software, the focus should be on final demand, because intermediate products come out in the wash. Without adequate valuation of final products, the contributions to real value of goods and services provided to consumers by the companies using the products of Oracle and Sun Microsystems are not measured. Other examples where the value of services provided to consumers is not measured is the convenience value offered by services such as eBay, Travelocity, and southwest.com.

Another area of work that I would endorse is the Jorgensonian framework. This provides a more comprehensive view of the economy, going beyond value added to total product flows, integrating GDP-by-industry flows with financial flows, and doing further work on intangibles.

Alan J. Auerbach

Robert D. Burch Professor of Economics and Law, University of California, Berkeley

I am particularly interested in three areas of data enhancement:

* Integration of the Federal Reserve financial data and BEA’s capital stock and savings data;

* More comprehensive measures of international capital flows, including derivatives and other instruments; and

* More comprehensive measures of compensation, including stock options, bonuses, etc.

Therefore, I would appreciate a discussion of the steps that BEA plans to take in each of these areas; that is, what will we have that we don’t have now?

Also, it may be unrealistic to hope for this, but I would find it very helpful if some gauge of accuracy were available with initial GDP estimates. Growth rates are subject to considerable revision, and a statement of the “plus or minus” interval would be useful. Presumably, such a confidence interval would be based on past experience with revisions. Especially around turning points, where even the sign of the change in GDP is hard to predict, this additional information would provide an important caution to users of the statistics who are not particularly well-informed about the revision process.

Dale W. Jorgenson

Frederic Eaton Abbe Professor of Economics, Harvard University

The first issue to be addressed is, why do we need a new architecture for the national accounts? In this context, “architecture” refers to the conceptual framework for the national accounts. An example of such a framework is the United Nations’ System of National Accounts 1993 (SNA93). This provides a complete accounting system, including income and expenditure, production, capital formation, and wealth accounts. The purpose of such a framework is to guide the conceptual development of a system of national accounts.

A conceptual framework for the national accounts should be carefully distinguished from a specific plan for improvements to the accounts, such as the BEA strategic plan. The strategic plan focuses on BEA’s own plans for the future and is very important in laying out priorities and eliciting responses from the user community. However, the plan does not provide a rationale for the priorities or relate BEA’s plans to those of other statistical agencies with interests in the national accounts. This is a particularly important omission in a decentralized statistical system, like the Federal system in the United States.

An illustration of an issue that would be part of a new architecture is the integration of the national income and product accounts (NIPA’s) with the capital formation and wealth accounts that form the flow of funds accounts, produced by the Federal Reserve Board (FRB). BEA has made important progress in developing the asset side for such a system through its capital stock study. And the results have been incorporated into the national balance sheet by the FRB. However, new architecture or new thinking is required to link the balance sheet to the generation of incomes and products.

The second issue to be considered is, why not use SNA93? SNA93 would be part of any new architecture, since it embodies the collective experience of the national accounting community and is familiar to many people working on the U.S. national accounts. However, it fails to provide the income and product accounts in current and constant prices needed for many applications of the national accounts, such as estimation of potential output. Consistency in the boundaries among the various component accounts is an unresolved issue in SNA93. Wealth, for example, refers to a different set of economic units than income and product.

A more fruitful approach begins with the NIPA’s and develops a system of capital formation and wealth accounts with the same boundaries. This could be linked to the generation of incomes and products, so that the income and expenditure and the production accounts could be presented in current and constant prices. These accounts could be generated at both aggregate and industry levels and would provide a link to productivity measurement, a critical omission in the original formulation of national accounting systems by Simon Kuznets, Richard Stone, and the other originators of these systems.

An important advantage of the approach I have suggested is that the NIPA’s would remain unchanged, at least initially. Improvements in the source data would continue to provide better estimates, including better deflation of outputs. However, the NIPA’s would be extended to encompass wealth accounts and these would gradually be integrated with the NIPA’s along the lines I have suggested. The new architecture would provide a new approach to national accounting that builds on the United Nations’ system but would gradually supersede it.

To illustrate some of the implications of the new architecture, I will consider the production account as an example. A detailed illustration of this account is given in my Presidential Address to the American Economic Association (“Information Technology and the U.S. Economy,” American Economic Review, March 2001, pp. 1-32.) This takes BEA’s concept of gross domestic product (GDP) as a point of departure and adds estimates of capital and labor inputs to convert gross domestic income to constant prices. These estimates incorporate capital data from the BEA capital stock study.

I have just completed a new paper giving detailed production accounts by industry. These incorporate the BEA interindustry transactions accounts. (“Information Technology, Higher Education, and the Sources of Economic Growth across U.S. Industries,” with Mun S. Ho and Kevin J. Stiroh, to be presented to the Conference on Research in Income and Wealth, Washington, DC, April 26-27, 2002.) For each industry the output is BEA’s “gross output,” and the input is broken down by capital, labor, and intermediate inputs. Each of these is presented in current and constant prices.

The key innovation in this production account is the introduction of the concept of the flow of capital services. This is employed in the NIPA’s in measures of the rental value of housing. The new architecture extends this idea to all categories of assets included in the BEA capital stock study. A parallel concept of the flow of labor services is broken down by age, sex, education, and class of employment with individual components weighted by total compensation per hour worked. The detailed architecture is laid out in Paul Schreyer’s Productivity Manual, published by the Organisation for Economic Co-Operation and Development in 2001.

What are the next steps in developing a new architecture for the production account? The first order of priority should be development of a conceptual framework for integrating the NIPA’s and the BEA interindustry transactions accounts. This has been done by Robert Yuskavage (“Priorities for Industry Accounts at BEA,” paper presented to the BEA Advisory Committee, November 17, 2000). A very important detail is providing a time series link between the industry accounts before and after the introduction of the North American Industry Classification System (NAICS).

A longer-term issue is consideration of production of annual interindustry transactions tables on the same schedule as the NIPA’s. This is already done by the Office of Occupational Statistics and Employment Projections at the Bureau of Labor Statistics (BLS), but using less detailed data than in BEA’s annual tables. However, the BLS tables are available at the same time as the NIPA’s. Unfortunately, they do not incorporate the latest information from the annual revisions of the NIPA’s. A system for producing the two data sets simultaneously is already in place in Australia and Canada and has been adopted by the United Kingdom. This should be considered by BEA.

The third step would be construction of a production account at both aggregate and industry levels along the lines I have suggested. Fortunately, much of the required work is already available, at least in prototype, in the papers I have written on the production account. These are carefully integrated with the NIPA’s and other data sets produced by BEA, such as gross product originating, the capital stock study, and hours worked. Unfortunately, my papers inherit some of the gaps in the BEA data sets, such as the inconsistency between the NIPA’s and the interindustry transactions accounts.

I have sketched the new architecture for the production account of the NIPA’s as an illustration of the conceptual work to be done. Similar issues arise for the income and expenditure account, as well as the capital formation and wealth accounts, which should be considered together. The first of these can be considered within BEA, but involves important practical issues, such as reconciling commodity flow and expenditure data on personal consumption expenditures. The second involves agreement on a common architecture with the FRB and implementation of a joint program to produce wealth accounts on the same schedule as the annual NIPA’s.

A further development of this architecture, foreshadowed by SNA93, would add satellite accounting systems modeled in the integrated system. For example, nonmarket activity related to time use could be compiled in the form of production, income and expenditure, and wealth accounts. Barbara Fraumeni and I have done this in a series of papers, focusing on investment and saving in the form of human capital. (Reprinted in my book, Postwar U.S. Economic Growth, The MIT Press, 1995, pp. 273-388.) This would provide guidance to statistical agencies outside BEA for developing satellite systems consistent with the NIPA’s.

The idea that national accounting is a field that has become isolated from the rest of economics can now be laid to rest. There are many exciting problems that lie ahead in developing a new architecture for the national accounts, and many of these will require the skills in economics that have been developed by the BEA staff. Members of the staff will find enthusiastic support from the academic research community with interests in economic measurement. Economists are on the verge of creating a new way of measuring and understanding our new economy.

Robert J. Gordon

Stanley G. Harris Professor in the Social Sciences, Northwestern University

BEA has made much progress. I like the cooperation that is occurring between government and academic economists. The U.S. leads the world in quality-adjusted prices. I also like the speed-up that is occurring in GPO-by-industry estimates. My priorities include a regular publication of reconciliations of various government estimates, particularly between the NIPA’s and the flow of funds accounts. Other reconciliations should include the CPI and PCE deflators, GPO by industry and corresponding BLS estimates of productivity and output, and the index of industrial production and the NIPA’s. I would like to see the publication of quarterly real capital stock estimates, and I want better investment deflators. The use of scanner data should lead to improved CPI estimates. There are problems with some matched-model estimates. Price indexes for nonresidential construction are also in need of improvement. Finally, I would like to see more historical research; for example, why have the 1929-48 growth rates been revised up?

Marina v.N. Whitman

Professor of Business Administration and Public Policy, University of Michigan

It’s difficult to add much to the very thorough analysis that has already occurred. The data required to implement the suggestions are in principle available; the issue on the Government side is whether the necessary resources–money and people–can be made available and, on the corporate side, whether companies are willing to collect and compile the necessary data, which in some cases can be a major task.

As regards the need for better, more complete, and more timely data, one can only say “yes indeed,” but one must also recognize the trade-off between the speed with which initial estimates come out and the potential size of later revisions.

In particular, better data on services are essential, and becoming more urgent as services’ share of our national GDP continues to increase. Furthermore, services are less likely than goods to be provided across national boundaries in the form of exports or imports as traditionally defined, since they generally require both investment and presence in the local market to be served. This fact links the growing importance of cross-boundary services to the need for alternative measures of international trade and finance in the balance of payments accounts, an issue that I’ll discuss in more detail later.

As regards interactions between financial and real markets (that is, integrating BEA’s NIPA and balance-of-payments accounts with the Fed’s flow-of-funds and balance-sheet accounts), what is needed is not only better data on derivatives and other financial instruments, particularly for short-term and portfolio capital flows, but also, for direct foreign investment, a clearer distinction between the physical location of an investment and its sources of financing. And, within the direct foreign investment accounts, means should be found to reconcile flows with changes in stocks. Currently, they tend not to match up at all (sometimes even the signs are different), even when valuation changes are taken explicitly into account.

Currently, the U.S. balance on goods and services in our balance-of-payments accounts is measured according to the traditional “residency” concept: Things produced in the United States and sold abroad are defined as exports; things produced abroad and sold here are imports. The “alternative” measure under discussion substitutes the concept of “ownership” for that of “residency”; goods and services produced by American-owned firms anywhere in the world are “exports,” while those produced by foreign-owned firms, even if physically located within U.S. borders, are counted as “imports.”

The growing focus on this alternative measure reflects the vast increase in the complexity of American multinationals’ activities, a development that has been a major factor in global economic integration, as well as the recognition that trade and direct investment are often complements, as opposed to the traditional view that they are competing channels through which to serve markets abroad. In fact, as companies have sliced and diced the value-added chain into ever-finer pieces, overseas sales by U.S. firms’ foreign affiliates (either for local sale or as inputs into exports to the home country or to third markets) have increased substantially in importance relative to exports directly from the headquarter’s country.

The question of whether the residency or the ownership concept is more relevant to the distinction between “domestic” and “foreign” goods and services has been on the radar screen at least since the early-1990s debate between Bob Reich and Laura Tyson regarding “who is us?”. The question is relevant for a variety of national policy issues–including, for example, the question of which firms should be eligible for membership in government-private partnerships, such as the Clinton Administration’s Partnership for a New Generation of Vehicles, that contain an element of public subsidy.

In fact, the answer differs with the question at issue. Where returns to labor, in the form of jobs and wages, are concerned, it is the residency concept that matters; for returns to capital, the ownership concept is generally more appropriate. The ownership concept also dominates with respect to the United States’ economic influence on the world economy, the global competitiveness of American firms, and issues regarding market access for these firms. And, contrary to long-held beliefs, neither concept is fully adequate where pressures on currency markets are the issue. Thus, the answer to the question “which one should we track and measure?” is in this case “both.”

The expanded use of the alternative definition poses issues of its own, however. Among them are:

* Just how should “net” be defined? A National Academy of Sciences report subtracts purchased goods and services to arrive at its definitions, while the BEA/ Julius version subtracts these plus payments to foreign labor and capital. Which is the correct definition depends, again, on the question at hand. The former is a measure of the globalization of American multinationals’ activities, while the latter measures their direct impact on the economy of the United States and of those other nations where U.S.-owned multinationals conduct activities.

* How is “control” defined? In traditional balance-of-payments accounting, 10-percent ownership is the dividing line between “portfolio” and “direct” investment. But if one includes any ownership level below 51 percent, there is a potential for double-counting; in principle, the controlling interest in the firm could reside in more than one country.

* The term “ownership” is itself ambiguous. Should one weight ownership by the fraction of a firm’s total shares held in each country? And is it even possible to collect such data?

* What are the implications of the alternative measure of goods-and-services accounting for its mirror image in the financial accounts?

Stepping back for a better view of the forest, two broader questions arise:

* How reluctant will firms be to collect and compile the data necessary for either definition of netting, whose requirements are far more detailed and complex (and therefore more expensive in both time and money) than simply gathering data on gross sales in each country where the firm does business?

* As intrafirm trade has grown as a proportion of total trade, issues of internal transfer pricing have loomed larger with respect to such policy issues as taxation, dumping, and others. But with the continuing breakup of the value-added chain and the wide variety of partnerships, alliances, etc. that are continuously coming into being, the boundaries of a “firm” may themselves become increasingly fuzzy, implying that it may become harder to tell “us” from “them” at the level of the firm as well as that of the Nation.

William D. Nordhaus

A. Whitney Griswold Professor of Economics, Yale University, and Chair of the BEA Advisory Committee

The U.S. national economic accounts are by necessity a work in progress. Their unfinished state is in part due to the limited resources available to any statistical agency. But even more it reflects the underlying evolution in the nature and composition of the economy, changes in available source data, improved statistical and economic methodologies, and increased linkages with the world outside our borders, along with changes in the priorities of those who use the accounts. These incessant changes require a parallel philosophy among those who design and produce the accounts.

There are many possible targets for developing and broadening the national economic accounts. In this brief overview, I will list three that appear to be central to me. The first category, improving the core accounts, involves relatively straightforward extensions of the current activities of BEA. The second, integration of income and capital accounts, requires a new initiative and improvements in underlying source data. The third category, developing satellite accounts on nonmarket activities, will require new methodologies but will illuminate our society in ways that cannot be captured by existing market accounts.

Improve timeliness, accuracy, and coverage of core accounts

The U.S. national income and product accounts (NIPA’s) arose in response to the Great Depression. Measures of national output at that time were incomplete and produced with a long lag, so policymakers had only impressionistic views of economic trends based on scattered financial and industrial data. The first accounts were developed at the Commerce Department in collaboration with the National Bureau of Economic Research under the leadership of Dr. Simon Kuznets, who received the Nobel Prize for his pioneering role in that work. These accounts were submitted to the Senate in 1934 and published as a Senate document.

Since that time, the “core accounts,” which consist of the major accounts for income, product, and expenditure, have been developed and expanded in many directions. Among the important developments have been sectoral and regional accounts as well as series that illuminate trends in national saving and investment, per capita output and income, the return to capital, inflation, productivity, the shares of income going to different factors of production, international linkages, and the sources of economic growth. The current core accounts are an essential ingredient for analyzing U.S. economic conditions and trends.

Given the continuing importance of the core accounts, I would point to three general areas that could use some tuning up.

Recommendation 1. The first priority for BEA is continuing to improve the coverage and detail of the core accounts.

Continuing to develop and improve the core accounts should clearly be the top BEA priority. The BEA strategic plan contains many elements for improving the core accounts. (1) Among the most important items to improve existing accounts, I would place the following: Development of a full set of integrated income and wealth accounts; more timely publication of the input-output data; continuing the development of the industry accounts with a full set of comparable historical data; improvement of source data with particular attention to the income side of the accounts; ensuring a smooth transition to the new North American Industry Classification System (NAICS); and improved measurement of real output in those sectors where price indexes are deficient. Some of these will be discussed in greater detail below.

In addition to the ongoing work on improving and developing the core accounts, I point to two areas that deserve particular attention.

Recommendation 2. Working with the Bureau of Labor Statistics (BLS), BEA should work to improve the price indexes underlying the national accounts.

It is little appreciated that the Government virtually never measures “real GDP.” Rather, real output is derived from nominal output and the associated price indexes. For this reason, developing accurate price indexes is critical for the accurate measurement of the real side of the national accounts.

One of the most exciting areas for those working with government data has been the improvement in price indexes over the last two decades. BEA has been in the forefront of this movement, first with computer prices, and then, working with BLS, in many other areas.

Much progress has been made–but much work remains to be done. BEA and BLS need to continue to develop realistic price indexes for those areas of the accounts where input-type measures are used (such as in financial services and health care) or where the deflators are not closely related to the actual good or service to which it is associated. Additionally, BEA and BLS should continue to march ahead in improving their measures of quality change and the inclusion of new products, particularly with the introduction of hedonic techniques where appropriate. (2)

Recommendation 3. BEA should work to improve the timeliness and accuracy of its reports and to develop an experimental monthly GDP series.

One area of continuing importance for the national accounts is to produce data that will improve our understanding and therefore our managing of business cycles. The economic history of the recession of 2001 will ultimately be written based primarily on the data coming from the national accounts along with data from the labor market.

Currently, the “advance” GDP estimates are published at the end of the first month following the end of the quarter to which they refer. The timing and quality of the advance estimates are limited by the absence or poor quality of certain key data, such as those on inventories and international trade. It seems likely that a modest investment in improved source data in a few key areas can shift the entire schedule of releases forward by 1 or 2 weeks. While I know of no formal studies of the value of early information in this area, the value is likely to be many times larger that the cost of gathering the required new data to prepare more reliable and timely GDP estimates.

BEA prepares estimates for the major output and income series averaged on a quarterly and annual basis. I have never understood why the subannual basis for the accounts was quarterly rather than monthly, weekly, or semiannually, although I would guess that this practice arose because company accounts, which were originally so critical to national accounts, were presented on a quarterly basis.

I would recommend that BEA consider developing the major income and product accounts on a monthly basis. Indeed, at present many components of the accounts (incomes, production, and prices) are already available on a monthly basis. Consumption, government spending, inventory changes, foreign trade, labor market data, and virtually all major income measures except profits are available on a monthly basis. It would appear relatively straightforward to develop procedures for estimating or interpolating the missing variables on a monthly basis. It should be emphasized that the only current monthly output measure, the Federal Reserve’s monthly industrial production index, is unrepresentative of the economy in that it covers less than 20 percent of GDP and omits the entire service and trade sectors.

There are many reasons for developing monthly GDP, but one important reason is that it will provide more timely and useful information on the pattern of cyclical movements. The business cycle of 2001 provides a useful illustration. Most economic data indicated that the economy was slowing from early 2001 and that the trauma of 9/11 had accelerated the downturn. Forecasts in late September and October 2001, particularly those from the New York financial community, were extremely gloomy. Data on sensitive sectors, such as travel and finance, tended to reinforce the gloom.

Because of the peculiar shape and timing of the 9/11 aftermath, the quarterly GDP data were unhelpful for forecasters and policymakers. The sharpest economic reaction to 9/11 probably came in late September and early October 2001, but this would have affected only one-sixth of the data for the third quarter. The major impact on GDP, if there were one, would be seen in the fourth quarter, whose advance and incomplete estimates were not available until January 30, 2002. Indeed, it was not until the preliminary estimates became available on February 28, 2002, that it became clear that real economic growth for the fourth quarter of 2002 was safely in the positive range. The growth rate for the second half of 2001 was essentially zero, and indeed, based on output movements, the recession appears to be the mildest in post-World War II history. (3)

Without the actual monthly GDP data, we cannot know how the pattern of output in late 2001 would have looked. But it is surely possible that by November 2001 discerning eyes would have suspected that the downturn was very mild and that the recession had essentially come to an end. Whether major policy errors were made in anticipation of a serious recession will have to wait for further analysis, data, and reflection.

Monthly GDP will be no panacea for policymakers. It may prove highly volatile and subject to excessive revisions. However, given BEA’s existing data, it would seem useful to provide monthly GDP data on an experimental basis.

Improve and integrate asset and wealth accounts with income and product accounts

The next set of suggestions involves issues that are directed toward major conceptual gaps in the U.S. economic statistical system that BEA is most centrally posed to fill. While there are many issues, I will focus on developing a full set of asset and wealth accounts and linking those with the income and product accounts.

Historically, BEA has focused its work on developing income, expenditure, and product accounts, along with elaborations in terms of sectoral, regional, and international detail. Much less attention has been devoted to asset and wealth accounts, or to linking the asset and wealth accounts to the income and product accounts. At present, BEA maintains a detailed set of accounts on capital and capital formation, while the Federal Reserve has the financial complement of that in its flow of funds accounts. However, the United States at present does not have a comprehensive set of asset accounts that is conceptually consistent with and linked to the income and product accounts.

In this respect, it is instructive that we speak of the NIPA’s rather than the national economic accounts. One of the major tasks of BEA and its sibling agencies should be to broaden the U.S. accounts to encompass a comprehensive set of national economic accounts linking production, income, consumption, accumulation, and wealth. The development of a set of national economic accounts is a major feature of the internationally developed system of national accounts (SNA). (4) Many of the principles and practices involved in a comprehensive set of national economic accounts have been realized for the United States in the Jorgenson set of accounts. (5) In moving toward a set of comprehensive accounts, the United States would also help achieve the important goal of harmonizing its accounting practices with those of other countries.

Recommendation 4. BEA should work with the Federal Reserve to develop a full set of asset and wealth accounts.

Recommendation 5. BEA should develop a full set of linked national economic accounts that include production, income, consumption, accumulation, and wealth.

These recommendations are really two prongs of a common research project, which is to elaborate the wealth and asset structure of the United States and to make the linkage of the asset and accumulation accounts to the income and product flows.

The major purpose of such a set of accounts would be to provide a full and consistent framework for understanding the evolution of income, capital formation, and wealth. I will sketch two important applications here: Resolving the ambiguity about techniques for measuring the national and personal savings rates and improving current measures of saving and investment.

The first point involves conceptual difficulties in measuring savings. The traditional product-account (or NIPA) measure of saving in the national income accounts is the difference between current income and consumption. The NIPA definition contrasts with the asset-account definition, which is (or should be) the change in real net wealth. The difference between the production-account and the asset-account definitions became particularly large during the asset bubble of the late 1990s. Data compiled by Gale and Sabelhaus indicate that for the 1990-99 period, the personal savings rate was a meager 3 percent of income using the product-account definition and a healthy 17 percent using the asset-account definition. (6) A similar calculation by Lusardi, Skinner, and Venti found the net asset-account savings rate for 1999 was 45 percent while the NIPA savings rate was 3 percent. (7) An integrated set of accounts, with a reconciliation table for different concepts, would help policymakers and analysts keep the different concepts and numbers clearly in mind.

A second set of issues concerns the narrowness of current product-account measures of saving and investment. It is not generally recognized that current measures of investment and saving cover an extremely limited sphere, including only investment in tangible capital (such as factories, equipment, inventories, and houses) along with software. Current concepts omit a wide variety of investment-type activities. Some important omissions are the acquisition of tangible nonhuman capital–such as consumer durables by households; development of land; expenditures for research and development; expenditures for education; the opportunity costs of students’ time; the opportunity cost of training; and much of the Nation’s expenditures for health.

It must be hard to explain to a student or a Secretary of Commerce why the purchase of a factory to produce a new drug is investment while the expenditure on research on that drug is not; or why building a new library is investment while purchasing new books for the shelves is not. We have only the sketchiest of estimates for the size of the omission, but estimates by Eisner indicated that the standard definition might underestimate the national saving and investment rate by as much as 500 percent. (8) Recent studies of Jorgenson and Fraumeni lead to similar conclusions. (9)

A great capitalist country such as the United States needs a fully developed set of capital accounts.

The challenge of accounts for nonmarket activity

A final important challenge for the longer term lies in the area of nonmarket accounts. The national income and product accounts are the most important measures of overall economic activity for a nation. Nevertheless, since their original development, there have been concerns that the accounts are incomplete and misleading because they do not cover vast continents of nonmarket activity such as unpaid work, the value of leisure time, much investment in human capital, and, most recently, the impact of and on the environment.

The four recommendations in this area involve research, methodology, developing the framework, and data collection to begin the construction of nonmarket accounts. These activities should be undertaken jointly by BEA, other Federal statistical agencies, private researchers, along with the activities in other countries, but BEA can play a key leadership role in organizing these efforts.

Recommendation 6. BEA should work with other government agencies and with private researchers to begin development of the framework and data collection for a set of nonmarket accounts.

The threshold question is why should we devote scarce intellectual and governmental resources to studying nonmarket sectors? The basic reason is that economic and social welfare does not stop at the market’s border but extends to many nonmarket activities.

Three particular areas are worth emphasizing. One important reason why we need better measures of nonmarket activity is because we spend increasingly fewer of our lifetime hours in market activities. A second and more speculative reason concerns the growing importance of nonmarket assets or mispriced market assets such as the environment and technology. A third reason, highlighted above, is that current measures of national saving and investment are defective because they omit much of the investment that takes place outside the marketplace. I will highlight three priorities in developing nonmarket accounts: green accounts, time-use studies, and health accounts.

Recommendation 7. Among the priorities for nonmarket accounts is the development of a set of resource and environmental accounts.

Critics of conventional accounts point to their omission of the contribution of natural resources and the environment to economic activity. Environmentalists argue that America’s wasteful, consumptive ways are squandering our precious “natural capital.” This issue was partially addressed when BEA unveiled its integrated environmental and economic satellite accounts (or IEESA’s), designed to estimate the contribution of natural and environmental resources to the Nation’s income. The first step, published in 1994, was a set of accounts for subsoil assets including oil, gas, and subsoil minerals. (10)

Many were surprised by the results of this first assay into green accounting. BEA’s estimates take into account that discovery adds to our proven reserves at the same time that extraction subtracts from or depletes these reserves (whereas both these activities are omitted from current core accounts). In fact, these two activities were almost exactly offsetting in the period BEA investigated. The net effect of both discoveries and depletions from 1958 to 1991 was between minus $2 billion and plus $1 billion, depending on the method used, as compared with an average GDP over this period of $4,200 billion (in 1992 prices). Another important finding was that the rate of return to nonfinancial capital was reduced by 1 to 2 percentage points when depletion was accounted for.

A full set of environmental and resource accounts would require further work to develop accounts for renewable resources (such as timber and water) and environmental assets (such as the cost of emissions or the impact of air pollution on the economy and human health). Although a great deal of work has been done on valuing components of air quality, to date there have been no comprehensive environmental accounts for the United States. However, a recent study by the U.S. Environmental Protection Agency suggests that, in contrast to the minerals accounts, environmental accounts might produce large numbers. (11) Much methodological work and data gathering are required before a full set of environmental accounts can be developed. Many of the issues were reviewed by a panel of the National Academy of Sciences, whose report was published by the Academy and in the SURVEY OF CURRENT BUSINESS. (12)

Recommendation 8. The U.S. should continue to work toward a comprehensive time-use survey of the U.S. population, which is the single most important data source for understanding nonmarket activity.

The most precious of all our endowments is time, the 24 hours each day that we have to “spend” in work or play or study. Compared with many trivial areas, we know next to nothing about how Americans use their time because, unlike most other major countries, the United States does not collect regular data on time use by the population. This important gap in the Federal statistical system will be filled beginning with the BLS American Time Use Survey (ATUS), scheduled to begin in early 2003 and designed to measures the amount of time people spend doing various activities, such as paid work, childcare, volunteering, commuting, and socializing. (13) This initiative is in my view the most important and exciting Federal statistical initiative today and deserves careful continuing review and ample fiscal resources.

Better data on time use is critical for many areas in augmented and nonmarket accounting. We need time-use data for building household accounts, for estimating the relative importance of nonmarket investment and consumption, for estimating trends in leisure time, and for understanding the activities of that third of the U.S. population that is retired. Moreover, current measures of work hours used in productivity measures could be improved with focused time-use studies, particularly for the growing share of the workforce (such as professionals for which data hours are relatively unreliable).

One unique feature of time budgets is that they provide a comprehensive budget that includes all activities–nonmarket as well as market. Because time inputs are the most valuable economic input, a time budget will also allow a rough estimate of the relative importance of market and nonmarket activities. While we have extremely sparse historical time-use data for the United States, data on time use in the United Kingdom over the last century indicate that work hours have declined from about half to less than 20 percent of disposable adult hours, although that trend appears to have stabilized in recent years. (14) An important topic is to determine the relative importance of nonmarket and market activities.

Recommendation 9. Estimating intangible and nonmarket investments is a high priority for both nonmarket accounts and for understanding saving and wealth.

A large and growing share of the economy’s resources is devoted to investments in education, research, and health. As noted above, because of faulty accounting, their contribution to economic welfare is misclassified, underestimated, and omitted–misclassified because they are largely treated as consumption or intermediate product rather than investment; underestimated because we routinely mismeasure the real output growth of these activities; and omitted because the accounts leave out those activities, particularly important for education, that occur outside the marketplace.

A sector in which augmented accounts may be particularly illuminating is the health-care sector. I will summarize a recent study that asks how standard measures of income would change if they adequately reflected improvements in the health status of the population. (15) Traditional income and product accounts look at the flows of consumption and income but do not consider the length of life or the quality of the population’s health. We might broaden our accounting concepts to include “health income” by correcting income measures for mortality and morbidity changes. Such an approach would take into account improvements in health status along with the implicit prices of improved health. If, for example, an individual would pay 1 percent of market consumption each year to gain an additional life-year, then we use that value to account for improvements in health status.

An example will illustrate the methodology. From 1975 to 1995, the population-weighted average annual mortality rate declined by 2.25 per year per thousand persons. Using standard estimates of the willingness to pay to reduce mortality risk ($2.66 million per life saved in 1992 prices), this decline in mortality is valued at $5,985 per person per year over this period. The average per capita consumption over this period was $14,700 per year. Hence the economic value of improvements of living standards due to reduced mortality is 40 percent of consumption over this period, or about 2 percent per year. I have constructed a preliminary set of estimates of the value of improvements in life expectancy for the period 1900-1995 using actual data on life expectancy, population distribution, and consumption. (These estimates omit changes in morbidity, for which data are relatively poor.) The major result is that the value of improvements in life expectancy over the twentieth century was about as large as the value of the growth in all nonhealth market consumption goods and services put together. Over this period, the value of improved health or health income grew at an average annual rate between 2.2 and 3.0 percent of the value of market consumption whereas consumption grew at a rate of about 2.1 percent. This suggests that a proper accounting of the value of health improvements would produce a major revision to our measured living standards.

Conclusion

The purpose of this discussion has been to give a flavor of the exciting developments and prospects for improving and extending the national economic accounts. There is much fruitful work ahead that will sharpen our estimates, make them more timely and reliable, improve their utility for understanding both business cycles and economic growth, as well as broaden the purview of the national economic accounts.

BEA’s Strategic Plan for 2001-2005, Detailed Table

NATIONAL INCOME, EXPENDITURE, AND WEALTH ACCOUNTS

Programs and New Initiatives: FY 2001-2005

Programs 2001 2002

National Income and Prepared quarterly and Prepare quarterly and

Product Accounts annual estimates of annual estimates of

(NIPA) Estimates GDP and NIPA tables; GDP and NIPA tables.

published NIPA

volumes.

Monthly Personal Prepared monthly Prepare monthly

Income and Outlays estimates of personal estimates of personal

income and outlays. income and outlays.

Fixed Assets and Prepared annual Prepare annual

Consumer Durable estimates of fixed estimates of fixed

Goods assets and consumer assets and consumer

durable goods; durable goods; publish

released 1999 Fixed Assets volume.

comprehensive revision

estimates.

International Prepared NIPA Update NIPA estimates

Submissions estimates based on consistent with 1993

1999 comprehensive SNA for OECD. Prepare

revision consistent GFS for Treasury to

with new 1993 System submit to IMF.

of National Accounts

(SNA) for OECD.

Prepared Government

Finance Statistics

(GFS) for Treasury to

submit to IMF.

NIH Research & Prepared estimates of Prepare estimates and

Development (R&D) R&D biomedical price update weights of R&D

Biomedical Price index for NIH under biomedical price index

Index reimbursable contract. for NIH under

reimbursable contract.

New Initiatives

Implement North Converted inventory Prepare wage and

American Industry estimates to NAICS salary estimates with

Classification System basis; estimated NAICS source data,

(NAICS) personal consumption which will be

expenditures (PCE) and converted to a Standard

investment in Industrial

equipment with NAICS Classification (SIC)

source data. basis.

NIPA Central System Prepared functional Develop and program

Modernization requirements for new first phase of new

central system (joint central system (joint

with OCIO, with OCIO,

contractor). contractor).

Alternative Measures Completed joint paper Publish paper and

of Saving with Federal Reserve present it at

Board staff on conferences; prepare

alternative measures regular updates of

of saving. measures.

Interactive Web Data Developed tool to Extend tool to provide

Access provide selected, tables for fixed

annual, and 3-digit assets and consumer

NIPA tables interac- durable goods and for

tively on Web (joint underlying detail

with OCIO, (joint with OCIO,

contractor). contractor).

Convert Table Began work to automate Complete work to

Generation the generation of automate the genera-

tables for news tion of tables for

release and Survey news release and

(joint with OCIO and Survey (joint with

CBAD). OCIO and CBAD).

New Quality-Adjusted Introduced improved Conduct research and

Prices prices for local area develop new quality-

network equipment. adjusted prices.

Improved Services Conducted research and Conduct research and

Measures developed new measures develop new measures

of services. of services. Submit

proposals for new

measures of insurance

and other selected

services.

Improved Estimates of Developed and Review and improve

Software Investment introduced improved benchmark estimation

quarterly software of software.

estimation method.

Employee Stock Conduct research on Conduct research and

Options employee stock develop conceptual

options. framework for

measuring employee

stock options.

Federal Investment Began re-engineering Complete database

and Consumption of system for Federal design and user

System Government investment interface. Begin

and consumption testing.

estimates.

Research Statistical Researched possible Research on possible

Discrepancy sources of statistical sources of statistical

discrepancy; improved discrepancy; improve

estimate of GDP and estimates of GDP and

gross domestic income GDI.

(GDI).

Convert Time Series Prepare requirement to

Package to “Fame” convert analysts’

“satellite” systems to

Fame. Begin

conversion.

Misreporting Contract with Census

Adjustments Bureau to conduct

Current Population

Survey (CPS) exact

match study of

taxpayer misreporting

and work with IRS to

update measures of

voluntary taxpayer

compliance.

Methodology Papers Completed updated Complete updated

methodology paper for methodology papers for

corporate profits. government, foreign

transactions, and new

paper for fixed

investment.

Reengineer Private Develop requirements

Capital Stock and rewrite programs.

Estimates

Reengineer Government Develop requirements

Capital Stock and rewrite programs.

Estimates

Revise Tables to Begin table redesign.

Deemphasize Chained

Dollars

Recognize Government Prepare proposal to

and Nonprofit Output recognize output.

Real Government and Develop simplified

Nonprofit-by-Function annual real

Estimates government-by-function

estimates.

Research to Revise Conduct research and

Summary Accounts prepare proposal to

revise summary

accounts.

Research Sector Conducted research on Conducted research on

Definitions government enterprises government enterprises

and other sector and other sector

issues. issues.

Research Conducted research on Conduct research on

Flow-of-Funds integrating NIPA’s integrating NIPA’s

Integration with flow-of-funds with flow-of-funds

accounts. accounts.

Research on Work with BLS to

Compensation in Kind research new forms of

fringe benefits, such

as cafeteria plans.

Research on Nonprofit Conduct research on

Sector status of separate

nonprofit accounts.

Research on Chain Wrote and presented Refine paper, prepare

Inventories Method research paper on proposal.

chain inventories

method.

Improve Capital Stock Worked with Chief Prepare proposals for

Estimates Economist to comprehensive

investigate service revision.

lives and other

capital stock issues.

Interactive User-

Defined Chain

Aggregates

Research Sector Gross Work with IED to

Output investigate

feasibility of timely

estimates of gross

output by sector.

Research NIPA/ Conduct study of

International differences; prepare

Transactions Accounts proposals as

(ITA’s) Differences appropriate.

Research Pension Worked with Regional Work with Regional

Benefits Directorate to Directorate to

research accounting research accounting

for pension benefits. for pension benefits.

Research Accrual Conduct research on

Accounting feasibility of moving

some estimates (for

example wages,

personal taxes) to

accrual basis.

Coordinate with

regional programs.

Research Government Conduct research on

Inventories redefining government

inventories as part

of gross investment;

prepare proposal for

comprehensive

revision.

Research Separate Conducted research on Prepare SURVEY article

State and Local preparing separate to report estimates.

Government Estimates estimates for State Coordinate with

governments and for regional program.

local governments.

Research on

Reconciling Estimates

of Defense Equipment

and Change in Private

Inventories

Research on PCE

Classifications

Research on Motor Conduct research

Vehicle Estimates toward improving motor

vehicle estimates.

Scanner Data for PCE Purchase scanner data

for improved,

timelier estimates of

merchandise

composition.

Research

Capitalization of

Movies, Sound

Recordings

Research Construction

in Progress as Change

in Inventories

Research Production

Account and Capital

Inputs

Research Consumer

Durables Satellite

Account

Programs 2003 2004

National Income and Prepare quarterly Prepare quarterly and

Product Accounts estimates of GDP 2003 comprehensive

(NIPA) Estimates tables; begin 2003 revision estimates of

comprehensive revision GDP and NIPA tables.

estimates.

Monthly Personal Prepare monthly Prepare monthly and

Income and Outlays estimates of personal 2003 comprehensive

income and outlays; revision estimates of

begin 2003 personal income and

comprehensive revision outlays.

estimates.

Fixed Assets and Prepare annual Prepare annual and

Consumer Durable estimates of fixed 2003 comprehensive

Goods assets and consumer revision estimates of

durable goods; begin fixed assets and

2003 comprehensive consumer durable

revision estimates. goods.

International Update NIPA estimates Prepare NIPA estimates

Submissions consistent with 1993 based on 2003

SNA for OECD. Prepare comprehensive revision

GFS for Treasury to consistent with 1993

submit to IMF. SNA for OECD. Prepare

GFS for Treasury to

submit to IMF.

NIH Research & Prepare estimates of Prepare estimates of

Development (R&D) R&D biomedical price R&D biomedical price

Biomedical Price index for NIH under index for NIH under

Index reimbursable contract. reimbursable contract.

New Initiatives

Implement North Prepare for conversion Publish comprehensive

American Industry of all income-side revision estimates on

Classification System estimates to NAICS a NAICS basis; convert

(NAICS) basis in comprehensive PPI source data from

revision. SIC to NAICS basis.

NIPA Central System Test and implement the Begin second phase,

Modernization first phase of the developing enhance-

new central system ments for new central

(joint with OCIO, system (joint with

contractor). OCIO, contractor).

Alternative Measures Update the measures. Update the measures.

of Saving

Interactive Web Data Complete Web data

Access access project.

Convert Table Complete automation of

Generation remaining tables.

New Quality-Adjusted Conduct research and Conduct research and

Prices develop new quality- develop new quality-

adjusted prices. adjusted prices. If

Submit proposals for proposals are

prices of nonresi- accepted, publish

dential structures, revised estimates.

photocopy equipment,

and other selected

prices.

Improved Services Conduct research and Conduct research and

Measures develop new measures develop new measures

of services. If of services. Publish

proposals are revised estimates.

accepted, prepare

estimates.

Improved Estimates of Conduct research and Conduct research and

Software Investment develop improved develop improved

software prices. software prices.

Employee Stock Conduct research and Conduct research and

Options develop estimating develop source data

methodology for for employee stock

employee stock options.

options.

Federal Investment Complete, test, and

and Consumption implement system

System before the end of

December 2002.

Research Statistical Research on possible Research on possible

Discrepancy sources of statistical sources of statistical

discrepancy; improve discrepancy; improve

estimates of GDP and estimates of GDP and

GDI. GDI.

Convert Time Series Complete pre-revision Prepare post-revision

Package to “Fame” conversions, testing, conversions.

and implementation.

Misreporting Work with IRS to Work with IRS to

Adjustments update measures of update measures of

voluntary taxpayer voluntary taxpayer

compliance. compliance.

Methodology Papers Update methodology Update methodology

papers. paper for PCE. New

methodology papers for

other components.

Reengineer Private Continue rewriting Test and implement

Capital Stock programs. programs.

Estimates

Reengineer Government Test and implement

Capital Stock programs.

Estimates

Revise Tables to Implement table Publish redesigned

Deemphasize Chained redesign. tables as part of

Dollars 2003 comprehensive

revision.

Recognize Government Implement proposal to Publish revised

and Nonprofit Output recognize output. estimates of GDP by

type of product.

Real Government and Implement simplified Work on development of

Nonprofit-by-Function real government-by- refinements and

Estimates function estimates. quarterly real

government-by-function

estimates.

Research to Revise If accepted, implement Publish revised

Summary Accounts proposal to revise summary accounts.

summary accounts.

Research Sector Conduct research on

Definitions government enterprises

and other sector

issues.

Research Publish preliminary Continue research on

Flow-of-Funds attempt to consolidate integrating NIPA’s

Integration NIPA’s with flow- with flow-of-funds

of-funds accounts. accounts.

Research on Consider proposals

Compensation in Kind based on research. If

accepted, implement

proposals.

Research on Nonprofit Develop new tables to Conduct additional

Sector show nonprofit research to fill gaps

expenditures and in nonprofit accounts.

economic activity.

Research on Chain If proposal is Publish revised

Inventories Method accepted, implement estimates of

proposal for chain inventories.

inventories method.

Improve Capital Stock If proposals are Publish revised

Estimates accepted, implement estimates of capital

proposals. stock. Develop new

research projects.

Interactive User- Prepare requirements

Defined Chain and write programs for

Aggregates user-defined chain

aggregates.

Research Sector Gross If feasible, submit If accepted, implement

Output proposal to prepare proposal and publish

estimates of sector estimates of sector

gross output. gross output.

Research NIPA/ If accepted, implement Publish revised

International proposals to resolve estimates.

Transactions Accounts differences between

(ITA’s) Differences NIPA’s and ITA’s.

Research Pension If research is Research estimates of

Benefits accepted, prepare and employers’

submit proposal for contributions to

changes in comprehen- deferred compensation

sive revision. plans.

Research Accrual If research is Publish revised

Accounting accepted, prepare and estimates.

submit proposal for

changes in comprehen-

sive revision.

Research Government If proposal is Publish revised

Inventories accepted, prepare estimates.

revised estimates.

Research Separate

State and Local

Government Estimates

Research on Conduct research on

Reconciling Estimates consistency of timing

of Defense Equipment for estimates of

and Change in Private defense equipment and

Inventories private inventories.

Research on PCE Conduct research on

Classifications PCE product and

type-of-expenditure

classifications

relative to other

government and

international

classifications.

Research on Motor Conclude research and Publish improved

Vehicle Estimates prepare estimates.

recommendations.

Scanner Data for PCE Research scanner data Prepare proposal for

and compile prototype implementing scanner

estimates. databased estimates.

Research

Capitalization of

Movies, Sound

Recordings

Research Construction

in Progress as Change

in Inventories

Research Production Conduct research on

Account and Capital measuring capital

Inputs inputs as part of a

production account.

Research Consumer Work with Chief

Durables Satellite Economist to conduct

Account research on

implementing a

satellite account.

Programs 2005

National Income and Prepare quarterly and annual

Product Accounts estimates of GDP and NIPA

(NIPA) Estimates tables; publish NIPA volumes.

Monthly Personal Prepare monthly estimates of

Income and Outlays personal income and outlays.

Fixed Assets and Prepare annual estimates of

Consumer Durable fixed assets and consumer

Goods durable goods; publish Fixed

Assets volume.

International Update NIPA estimates

Submissions consistent with 1993 SNA for

OECD. Prepare GFS for

Treasury to submit to IMF.

NIH Research & Prepare estimates and introduce

Development (R&D) chain weighting of R&D

Biomedical Price biomedical price index for NIH

Index under reimbursable contract.

New Initiatives

Implement North Prepare for conversions

American Industry associated with NAICS 2002,

Classification System NAICS 2007, and North

(NAICS) American Product

Classification System.

NIPA Central System Test and implement the second

Modernization phase (joint with OCIO,

contractor).

Alternative Measures Update the measures.

of Saving

Interactive Web Data

Access

Convert Table

Generation

New Quality-Adjusted Conduct research and develop

Prices new quality-adjusted prices.

Improved Services Conduct research and develop

Measures new measures of services.

Improved Estimates of Conduct research and develop

Software Investment improved measures of foreign

transactions in software.

Employee Stock Conduct research and develop

Options estimates for employee stock

options.

Federal Investment

and Consumption

System

Research Statistical Research on possible sources of

Discrepancy statistical discrepancy; improve

estimates of GDP and GDI.

Convert Time Series Complete all revision

Package to “Fame” conversions, testing, and

implementation.

Misreporting Contract with Census Bureau to

Adjustments conduct CPS exact match study

of taxpayer misreporting and

work with IRS to update

measures of voluntary taxpayer

compliance.

Methodology Papers Annual updates of all

methodology papers.

Reengineer Private

Capital Stock

Estimates

Reengineer Government

Capital Stock

Estimates

Revise Tables to

Deemphasize Chained

Dollars

Recognize Government

and Nonprofit Output

Real Government and Work on development of

Nonprofit-by-Function nonprofit-by-function

Estimates estimates.

Research to Revise

Summary Accounts

Research Sector Prepare proposals to modernize

Definitions sector definitions of

government enterprises and

noncorporate business.

Research Publish improved integrated

Flow-of-Funds accounts.

Integration

Research on

Compensation in Kind

Research on Nonprofit Publish prototype nonprofit

Sector accounts.

Research on Chain

Inventories Method

Improve Capital Stock Conduct research on capital

Estimates stock issues.

Interactive User- Test and implement programs.

Defined Chain

Aggregates

Research Sector Gross

Output

Research NIPA/

International

Transactions Accounts

(ITA’s) Differences

Research Pension Developed improved estimates of

Benefits employers’ contributions to

deferred compensation plans.

Research Accrual

Accounting

Research Government

Inventories

Research Separate

State and Local

Government Estimates

Research on If research finds inconsistencies,

Reconciling Estimates prepare proposal to improve

of Defense Equipment estimates.

and Change in Private

Inventories

Research on PCE Conclude research and prepare

Classifications recommendations.

Research on Motor

Vehicle Estimates

Scanner Data for PCE If proposal is accepted, prepare

and publish estimates.

Research Conduct research on

Capitalization of recognizing production of

Movies, Sound motion pictures and sound

Recordings recordings as fixed investment.

Research Construction Conduct research on classifying

in Progress as Change construction in progress as

in Inventories change in inventories.

Research Production Continue research on

Account and Capital measuring capital inputs as part

Inputs of a production account.

Research Consumer Conduct research on

Durables Satellite implementing a satellite

Account account.

INDUSTRY ACCOUNTS

Programs and New Initiatives: FY 2001-2005

Programs 2001 2002

Benchmark Input- Initial estimates Review estimates for

Output (I-O) Accounts completed for 1997 Benchmark I-O

1997 Benchmark I-O Accounts and reconcile

tables on a NAICS with national accounts

basis. and balance of

payments accounts;

publish 1997 Benchmark

I-O tables.

GDP-by-Industry Estimates completed Publish GDP-by-

Accounts for GDP-by-Industry Industry Accounts for

Accounts for 2000. 2000; prepare GDP-by-

Industry Accounts for

2001

Annual I-O Accounts Estimates completed Publish Annual I-O

for Annual I-O Accounts for 1998;

Accounts for 1998. prepare estimates for

1999 Annual I-O

Accounts.

Implement NAICS Software developed and Convert 1999-2001

1998-2000 source data source data from NAICS

converted from NAICS to SIC basis for use

to SIC basis for use in annual programs.

in annual programs.

Foreign Trade Estimates prepared for Prepare monthly

Estimates monthly merchandise estimates of

exports and imports; merchandise exports

concordance maintained and imports; begin

between Harmonized conversion of

System (HS) and I-O concordance between HS

classifications. and I-O classifica-

tions from SIC to

NAICS basis.

International Estimates completed Prepare SNA-based,

Submissions for SNA-based, GDP-by- GDP-by-Industry

Industry Accounts for Accounts for

1987-99. 1998-2000.

IT Re-engineering Enhanced software Release new software

designed and developed for accessing I-O data

for accessing I-O data interactively from BEA

interactively from BEA Web site; design and

Web site; additional develop additional

software developed and web-based tools for

brought on-line for the analysis of I-O

benchmark I-O and GDP- data; complete

by-industry production benchmark I-O

processing systems. production processing

system.

New Initiatives

Accelerated Annual Research initiated for Prepare data files and

I-O Accounts the accelerated develop processing

release of Annual I-O system for accelerated

Accounts. release of Annual I-O

Accounts.

Accelerated GDP-by- Research initiated for Release pilot advance

Industry Accounts the accelerated estimates of 2001

release of GDP-by- GDP-by-Industry

Industry Accounts. Accounts in April (4

months from end of

year).

Accelerated Gross Research initiated, in

State Product (GSP) coordination with the

Accounts Regional program, for

the accelerated

release of GSP

Accounts.

Improved Gross Output Coordinate with NIWD

for Selected Services on the identification

(GDP-by-Industry) and prioritization of

service areas needing

improvement.

Investigate and

Implement Method to

Produce Benchmark I-O

Accounts with Less

Detailed Data

Re-engineering for

Data Transfer Between

Census and BEA

Review and Partially Bring estimates of

Reconcile Industry value added from the

Value Added for 1997 I-O and GDP-by-

Benchmark I-O GDP-by- Industry Accounts into

Industry Accounts closer alignment; as

part of final review

of 1997 Benchmark I-O

Accounts, compare with

estimates from GDP by

Industry.

Improved Consistency

of I-O, GDP-by-

Industry, and GSP

Estimates

NAICS-Based 1992

Benchmark I-O

Accounts

NAICS-Based GDP-by-

Industry Accounts,

1992-99

Review and Research Initiate research to

to Improve Legacy evaluate the quality

Estimating Rules Used of the estimating

for Benchmark I-O rules used to prepare

Accounts the Benchmark I-O

Accounts; prioritize

areas for additional

research.

Review and Reconcile With the Chief Work with the Chief

Gross Output with Economist, initiated Economist to identify

Comparable BLS research to identify differences between

Measures differences between BEA and BLS measures

BEA and BLS measures of nominal and real

of nominal and real gross output of

gross output of nonmanufacturing

nonmanufacturing industries.

industries.

Travel and Tourism With external funding, Dependent upon the

Satellite Accounts completed research to continuation of

and E-commerce improve estimation of external funding,

Satellite Accounts Travel and Tourism produce Travel and

Satellite Accounts. Tourism Satellite

Accounts; investigate

support for e-commerce

accounts.

Programs 2003 2004

Benchmark Input- Publish detailed data See Benchmark I-O with

Output (I-O) Accounts and documentation for less detailed data

the 1997 Benchmark I-O below.

Accounts; prepare and

publish the 1997

Capital Flow tables.

GDP-by-Industry Publish GDP-by- Publish revised GDP-

Accounts Industry Accounts for by-Industry Accounts

2001; prepare revised consistent with 1997

GDP-by-Industry Benchmark I-O and

Accounts consistent revised NIPA’s,

with 1997 Benchmark 1947-2002; prepare

I-O and revised NIPA’s GDP-by-Industry

for 2002. Accounts for 2003.

Annual I-O Accounts Publish Annual I-O Publish NAICS-based

Accounts for 1999; Annual I-O Accounts

revise Annual I-O for 2000, consistent

framework to be with 1997 Benchmark

consistent with 1997 I-O Accounts and

Benchmark I-O Accounts revised NIPA’s;

and revised NIPA’s. prepare estimates for

2001 Annual I-O

Accounts.

Implement NAICS Develop software and

revise data files for

annual programs to

NAICS-based source

data; prepare for

conversion to NAICS in

public data files.

Foreign Trade Prepare monthly Prepare monthly

Estimates estimates of estimates of

merchandise exports merchandise exports

and imports; complete and imports; maintain

conversion of concordance between HS

concordance between HS and I-O classi-

and I-O classifica- fications.

tions to a NAICS

basis.

International Prepare SNA-based, Develop procedures and

Submissions GDP-by-Industry software to prepare

Accounts for SNA-based, GDP-by-

1999-2001. Industry Accounts on

a NAICS basis.

IT Re-engineering Release expanded Prepare modifications

software with new of benchmark I-O

analytical tools for production processing

accessing and system to incorporate

manipulating I-O data data from the 2002

from BEA Web site; economic census.

modify further the

web-based system to

include NAICS-based

I-O data; modify

annual I-O and

GDP-by-industry

production processing

systems for NAICS-

based data.

New Initiatives

Accelerated Annual Develop pilot set of Publish Annual I-O

I-O Accounts tables for 2001 Annual Accounts for 2002.

I-O Accounts.

Accelerated GDP-by- Publish advance 2002 Publish advance 2003

Industry Accounts GDP-by-Industry GDP-by-Industry

Accounts. Accounts.

Accelerated Gross Coordinate with the Coordinate with the

State Product (GSP) Regional program on Regional program on

Accounts the development of the implementation of

software needed for accelerated release of

the accelerated GSP Accounts.

release of GSP

Accounts.

Improved Gross Output Coordinate with NIWD Coordinate with NIWD

for Selected Services on the preparation of on the implementation

(GDP-by-Industry) short papers of improvements to

describing potential measures of output,

improvements to the prices, and quantities

services areas. for selected services.

Investigate and Conduct research on Evaluate alternative

Implement Method to ways to simplify proposals for

Produce Benchmark I-O production of simplifying production

Accounts with Less Benchmark I-O Accounts of Benchmark I-O

Detailed Data and to increase Accounts and

efficient use of increasing efficient

source data; work to use of source data;

be contracted. implement

recommendations.

Re-engineering for Prepare requirements

Data Transfer Between analysis for direct

Census and BEA transfer of economic

data between Census

and IED, using

standardized coding

and formats.

Review and Partially Evaluate remaining

Reconcile Industry differences between

Value Added for 1997 value added from the

Benchmark I-O GDP-by- I-O Accounts and GDP-

Industry Accounts by-Industry Accounts;

compare data on

compensation from BLS

and Census; conduct

research on other

differences; document

findings and make

recommendations.

Improved Consistency Coordinate with the Conduct research to

of I-O, GDP-by- Regional program to improve consistency of

Industry, and GSP identify differences industry gross output

Estimates in data sources, and value added

estimating methods, estimates from the

definitions, and I-O, GDP-by-Industry,

classification and GSP Accounts;

conventions that document findings and

result in make recommendations.

inconsistencies of

estimates from the

I-O, GDP-by-Industry,

and GSP Accounts.

NAICS-Based 1992 Initiate work to Complete work to

Benchmark I-O recast 1992 Benchmark recast 1992 Benchmark

Accounts I-O Accounts from SIC I-O Accounts from SIC

to NAICS basis to give to NAICS basis to give

users means to produce users means to produce

time series; research time series; research

and implementation to and implementation to

be supported by be supported by

contractor. contractor.

NAICS-Based GDP-by-

Industry Accounts,

1992-99

Review and Research Conduct research to Complete research to

to Improve Legacy validate or improve validate or improve

Estimating Rules Used methods determined to methods determined to

for Benchmark I-O have a significant have a significant

Accounts impact on accuracy of impact on accuracy of

the accounts; prepare the accounts; complete

short papers on the preparation of

findings. short papers on

findings; make

recommendations.

Review and Reconcile Work with the Chief Work with the Chief

Gross Output with Economist to identify Economist to prepare

Comparable BLS and reconcile short papers that

Measures differences between document and explain

BEA and BLS measures the major differences

of nominal and real between manufacturing

gross output of and nonmanufacturing

manufacturing and measures.

nonmanufacturing

industries; prepare

short papers that

document and explain

the major differences

between manufacturing

and nonmanufacturing

measures.

Travel and Tourism Dependent upon Dependent upon

Satellite Accounts external funding, external funding,

and E-commerce produce Travel and produce Travel and

Satellite Accounts Tourism Satellite Tourism Satellite

Accounts; investigate Accounts; investigate

support for e-commerce support for e-commerce

accounts. accounts.

Programs 2005

Benchmark Input- See Benchmark I-O with less

Output (I-O) Accounts detailed data below.

GDP-by-Industry Publish GDP-by-Industry

Accounts Accounts for 2003; prepare

GDP-by-Industry Accounts for

2004.

Annual I-O Accounts Publish Annual I-O Accounts

for 2001; prepare estimates for

2002 Annual I-O Accounts.

Implement NAICS

Foreign Trade Prepare monthly estimates of

Estimates merchandise exports and

imports; maintain concordance

between HS and I-O

classifications.

International Prepare SNA-based, GDP-by-

Submissions Industry Accounts consistent

with the comprehensive

revision of the Accounts.

IT Re-engineering Complete modifications to

benchmark I-O production

processing system.

New Initiatives

Accelerated Annual Publish Annual I-O Accounts

I-O Accounts for 2003.

Accelerated GDP-by- Publish advance 2004 GDP-by-

Industry Accounts Industry Accounts.

Accelerated Gross

State Product (GSP)

Accounts

Improved Gross Output

for Selected Services

(GDP-by-Industry)

Investigate and

Implement Method to

Produce Benchmark I-O

Accounts with Less

Detailed Data

Re-engineering for Test and implement the new

Data Transfer Between process for transferring

Census and BEA economic data from Census to

IED, using standardized coding

and formats.

Review and Partially

Reconcile Industry

Value Added for 1997

Benchmark I-O GDP-by-

Industry Accounts

Improved Consistency Implement recommendations

of I-O, GDP-by- for improving consistency of

Industry, and GSP industry gross output and value

Estimates added estimates from the I-O,

GDP-by-Industry, and GSP

Accounts.

NAICS-Based 1992

Benchmark I-O

Accounts

NAICS-Based GDP-by- Backcast GDP-by-Industry

Industry Accounts, Accounts, 1992-99, from SIC to

1992-99 NAICS; research and

implementation to be

supported by contractor.

Review and Research Implement

to Improve Legacy recommendations.

Estimating Rules Used

for Benchmark I-O

Accounts

Review and Reconcile Work with the Chief Economist

Gross Output with to prepare short papers that

Comparable BLS document and explain the

Measures major differences between

manufacturing and

nonmanufacturing measures.

Travel and Tourism Dependent upon external

Satellite Accounts funding, produce Travel and

and E-commerce Tourism Satellite Accounts;

Satellite Accounts investigate support for

e-commerce accounts.

INTERNATIONAL ACCOUNTS

Programs and New Initiatives: FY 2001-2005

Programs 2001 2002

Balance of Payments Prepared estimates for Prepare estimates for

(BOP) Accounts the BOP accounts. the BOP accounts.

International Prepared annual Prepare annual

Investment Position estimates of the the estimates of the IIP.

(IIP) Estimates IIP.

Benchmark and Annual Prepared F&O Prepare F&O estimates.

Financial and estimates.

Operating (F&O) Data

Analyses and Articles Prepared standard and Prepare standard and

special articles and special articles and

analyses. analyses.

New Initiatives

Research Conducted research Conduct additional

Understatement of into existence of research and determine

Goods Trade Estimates undercounts in feasibility of

and Develop Bias reported imports or developing an

Adjustment exports. adjustment for NIPA

(but not for BOP)

purposes.

Accelerate Monthly With Census Perform research into

Estimates of U.S. cooperation, developed developing accelerated

Trade in Goods and an implementation plan estimation methods for

Services and schedule. direct investment and

unaffiliated services.

Derivatives Worked with members of Clear the survey

the Treasury inter- through OMB.

national capital (TIC)

user group to design a

quarterly survey.

NAICS Publish NAICS-based

estimates for position

and flows for Foreign

direct investment in

the United States

(FDIUS); and for

operations data from

1999 benchmark survey

of U.S. Direct

investment abroad

(USDIA).

Imrove Web Site For BPD, began For BPD, complete

development of Web development of Web

sites for all BOP data site. For direct

series. investment data, re-

design user interface

of Web page; begin re-

engineering of table

production system and

reformatting of

historical data.

Utilize Stratified Investigate feasi-

Sampling bility of using

stratified sampling in

annual survey of

FDIUS.

Quarterly Services Design quarterly

Surveys services survey and

redesign annual

services surveys to be

integrated with

quarterly survey.

Improve Estimates of Performed research Add short-term

Short-Term Financial into feasibility of financial instruments

Instruments adding short-term to TIC survey of

instruments to TIC securities claims.

surveys.

Institute More Worked with Treasury Develop estimation

Frequent Surveys of to develop annual routines and

Portfolio Investment surveys of securities procedures to in-

Assets and liabilities. corporate the results

Liabilities of the annual

liability surveys in

the accounts. Continue

conducting the annual

liability survey. Work

with Treasury to

design the annual

asset survey that

would cover 2003 and

later years.

Update Estimation Reviewed and updated Review and update

Methods estimation of quarterly direct

quarterly direct investment distributed

investment earnings, earnings.

with particular

attention to treatment

of negative earnings.

Expand Services Data Redesigned benchmark Conduct redesigned

Collection (Excluding survey of selected benchmark survey; use

Quarterly Surveys) services to improve preliminary results to

coverage of the update annual survey

following categories: to cover important new

Trade-related, services, including

auxiliary insurance, e-commerce-related.

waste treatment,

e-commerce-related,

and other.

Prepare Additional Worked with outside Prepare an article on

Special Studies researchers to analyze U.S. intra-firm trade

global expansion in goods; extend

strategies of U.S. analysis of propensity

firms; undertook of foreign manu-

analysis of propensity facturing affiliates

of foreign manu- to source inputs from

facturing affiliates their U.S. parents.

to source inputs from

their U.S. parents.

Update Statistical Performed research Develop revised

Methods in Light of into areas of estimates of insurance

International deviation from inter- services based on

Statistical Standards national standards; average claims;

identified all major perform research into

existing differences. estimating implicit

financial services

and, as appropriate,

other implicit

services.

Electronic Data Implemented Automated Implement ASTAR on

Collection Survey Transmittal and annual surveys of

Retrieval (ASTAR) transportation,

system on quarterly remittances, and

survey of FDIUS. financial services.

Programs 2003 2004

Balance of Payments Prepare estimates for Prepare estimates for

(BOP) Accounts the BOP accounts. the BOP accounts.

International Prepare annual Prepare annual

Investment Position estimates of the IIP. estimates of the IIP.

(IIP) Estimates

Benchmark and Annual Prepare F&O estimates. Prepare F&O estimates.

Financial and

Operating (F&O) Data

Analyses and Articles Prepare standard and Prepare standard and

special articles and special articles and

analyses. analyses.

New Initiatives

Research Collaborate with If the decision is to

Understatement of Census Bureau on implement a bias

Goods Trade Estimates whether to extend the adjustment to the

and Develop Bias NIPA bias adjustment goods and services

Adjustment (if made) to the goods release, implement it

and services release. this year.

Accelerate Monthly Work with Census to Begin issuing the

Estimates of U.S. develop methods of joint monthly press

Trade in Goods and filling any “holes” in release on an

Services the goods estimates accelerated basis.

(possibly including Monitor revisions in

goods exports to the services

Canada) that may estimates, and, where

hinder acceleration. the estimates are

weakest, perform

research into

improving them.

Derivatives Conduct the quarterly Continue to conduct

survey. the quarterly survey,

and include the data

in the BOP accounts.

NAICS Publish NAICS-based Publish NAICS-based

estimates from annual estimates for position

survey of USDIA; and flows for USDIA.

incorporate NAICS 2002

revisions in FDIUS

operations data.

Imrove Web Site For direct investment, For direct investment

complete development data, complete re-

of Web site; continue engineering of table

re-engineering of production system and

table production reformatting of

system and re- historical data.

formatting of

historical data.

Utilize Stratified If feasible, in- If feasible, use

Sampling corporate stratified stratified sampling to

sampling in design of conduct annual survey

annual survey of of FDIUS covering

FDIUS. 2003.

Quarterly Services Clear new and re- Implement quarterly

Surveys designed surveys; services survey in the

develop estimation first quarter of

routines and 2004.

processing systems

for quarterly surveys.

Improve Estimates of Incorporate into Add short-term

Short-Term Financial accounts estimates of financial instruments

Instruments short-term financial to TIC survey of

claims from TIC securities liabilities

survey. and incorporate

estimates into the

accounts.

Institute More Continue conducting Conduct annual

Frequent Surveys of and incorporating into portfolio investment

Portfolio Investment the accounts the surveys of both

Assets and results of the annual assets and liabilities

Liabilities liability surveys. and incorporate their

Continue working with results into the

Treasury to design the accounts.

annual asset survey,

covering 2003 and

later years.

Update Estimation Review and update

Methods estimation methods for

other BOP flow

accounts.

Expand Services Data Conduct updated annual Redesign benchmark

Collection (Excluding survey; publish final survey of financial

Quarterly Surveys) benchmark survey services as needed to

results; continue close any gaps and

research on e-commerce ensure coverage of new

transactions. services; continue

research on e-commerce

transactions.

Prepare Additional Prepare and publish Prepare and publish

Special Studies special studies to special studies to

broaden understanding broaden understanding

and extend analysis of and extend analysis of

data of the Inter- data of the Inter-

national Economics national Economics

Directorate. Directorate.

Update Statistical Incorporate revised Perform additional

Methods in Light of estimates of insurance research into areas of

International services into inter- deviation from inter-

Statistical Standards national transactions national standards

accounts; make (focusing on new

progress to resolve standards that may be

other major emanating from the

differences. Special Data Dis-

semination Standards

(SDDS) and inter-

national services

areas). Also, identify

areas where new

guidance may be forth-

coming in a new

Balance of Payments

Manual (BPM6) and

consider the

feasibility and

advisability of

adopting the new

standards for the U.S.

international

accounts.

Electronic Data Implement ASTAR on Implement ASTAR on

Collection benchmark and new annual survey of

investment surveys of FDIUS.

FDIUS and on annual

surveys of

construction,

insurance, royalties

and license fees, and

selected services.

Programs 2005

Balance of Payments Prepare estimates for the BOP

(BOP) Accounts accounts.

International Prepare annual estimates of the

Investment Position IIP.

(IIP) Estimates

Benchmark and Annual Prepare F&O estimates.

Financial and

Operating (F&O) Data

Analyses and Articles Prepare standard and special

articles and analyses.

New Initiatives

Research Continue to make bias

Understatement of adjustments, if appropriate.

Goods Trade Estimates

and Develop Bias

Adjustment

Accelerate Monthly Continue issuing the monthly

Estimates of U.S. release on an accelerated basis,

Trade in Goods and and continue performing any

Services needed research into improving

the accelerated estimates.

Derivatives Continue to conduct the

quarterly survey, and include

the data in the BOP accounts.

NAICS Incorporate NAICS 2002

revisions in USDIA operations

data.

Imrove Web Site Review and re-evaluate Web

site, to ensure it effectively

meets users’ needs.

Utilize Stratified Investigate feasibility of using

Sampling stratified sampling in annual

survey of USDIA.

Quarterly Services Continue to conduct quarterly

Surveys services survey; consider

expanding quarterly coverage to

additional categories of

services.

Improve Estimates of Continue incorporating the

Short-Term Financial estimates of inbound and

Instruments outbound short-term

instruments in the accounts.

Institute More Conduct annual portfolio

Frequent Surveys of investment surveys of both

Portfolio Investment assets and liabilities and

Assets and incorporate their results into

Liabilities the accounts.

Update Estimation

Methods

Expand Services Data Conduct redesigned benchmark

Collection (Excluding survey of financial services;

Quarterly Surveys) continue research on

e-commerce transactions.

Prepare Additional Prepare and publish special

Special Studies studies to broaden

understanding and extend

analysis of data of the

International Economics

Directorate.

Update Statistical Make progress in resolving all

Methods in Light of significant differences.

International

Statistical Standards

Electronic Data Implement ASTAR on

Collection benchmark survey of USDIA

and benchmark survey of

financial services.

REGIONAL ACCOUNTS

Programs and New Initiatives: FY 2001-2005

Programs 2001 2002

Annual/Benchmark Prepared SPI on SIC Prepare SPI (in

State Personal basis. September 2002) with

Income (SPI) NAICS 2002 industries

Including Disposable for the year 2001 with

SPI no overlap with SIC.

Annual/Benchmark GSP Prepared annual 1999 Prepare annual 2000

GSP estimates on SIC GSP estimates on SIC

basis. basis.

Quarterly SPI Prepared quarterly SPI Prepare quarterly SPI

estimates with SIC estimates with SIC

industries. industries.

Annual and Benchmark Prepared LAPI Prepare LAPI estimates

Local Area Personal estimates on SIC on SIC basis.

Income (LAPI) basis.

Regional Input-Output Evaluated feasibility Incorporate 1998

Multipliers of using annual I-O national annual table

tables in Regional into RIMS.

Industrial Multiplier

System (RIMS).

Implement NAICS- Converted annual Convert ASM, sales

Regional Program survey of manufactures tax, and BLS data from

(ASM) from NAICS to NAICS to SIC for GSP.

SIC. Prepare SPI on NAICS

basis.

New Initiatives

Accelerate Begin research on

Metropolitan Area acceleration of MAPI.

Personal Income

(MAPI)

Accelerate GSP Begin research on

acceleration of GSP.

Accelerate Country-

Level Personal Income

Implement Results of Investigate with BLS

Stock Options whether stock options

Research and other forms of

compensation are

consistently covered

in state ES-202 wage

data.

Prepare State Capital Began research on Experimental estimates

Stocks estimating State of public sector and

capital stock. manufacturing capital

stocks.

Prepare Pensions Continue research into

Received by State producing pension

distributions by

State. Develop test

estimates of pension

distributions by

State. Coordinate

results within BEA.

Interagency Work– Selected new person as Continue ECPC work on

NAICS, North American Economic Classi- NAICS 2002, NAICS

Product Classi- fication Policy 2007, and NAPCS.

fication System Committee (ECPC) Evaluate ACS early

(NAPCS), American member. Continued results.

Community Survey staff support. Began

(ACS) NAPCS committee work.

Represented BEA on ACS

interagency

committees.

Bottom-up Estimate of

State and Local Taxes

Bottom-up Estimate of

Temporary Assistance

for Needy Families

(TANF) Components

Improve Consistency

of I-O, GDP, and GSSP

Programs 2003 2004

Annual/Benchmark Prepare SPI with NAICS Prepare SPI with NAICS

State Personal 2002 industries. 2002 industries.

Income (SPI) Prepare comprehensive

Including Disposable revisions.

SPI

Annual/Benchmark GSP Prepare annual 2001 Prepare benchmark 2002

GSP estimates on SIC GSP estimates on NAICS

basis. basis with SIC overlap

reference year 2002.

Quarterly SPI Prepare quarterly SPI Prepare quarterly SPI

with NAICS 2002 with NAICS 2002

industries for 2001 industries. Prepare

and 2002 with no comprehensive

overlap. revisions.

Annual and Benchmark Prepare LAPI with Prepare LAPI with

Local Area Personal NAICS 2002 industries NAICS 2002 industries.

Income (LAPI) for 2001 with no Prepare comprehensive

overlap with SIC revisions.

industries.

Regional Input-Output Convert to NAICS Prepare multipliers on

Multipliers (conversion by IED NAICS basis.

and REMD are

prerequisites).

Incorporate 1999

national annual I-O

table into RIMS.

Implement NAICS- Convert all GSP source Implement NAICS with

Regional Program data from NAICS to 2002 as the NAICS/SIC

SIC. Prepare GSP overlap year for GSP.

estimation programs

for conversion to

NAICS. Prepare local

area personal income

on NAICS basis

New Initiatives

Accelerate Document source data Prepare data files and

Metropolitan Area schedules and develop and test

Personal Income establish partnerships estimation software to

(MAPI) with source data produce preliminary

agencies to accelerate annual MAPI.

data availability. Investigate disposable

MAPI.

Accelerate GSP Prepare data files and Implement advance

develop estimation estimates for 2003

software. Produce total GSP. Produce

advance total GSP for experimental advance

reference year 2002. industry estimates of

GSP for 1-digit

industries.

Accelerate Country- Begin research on Document source data

Level Personal Income acceleration of schedules and

country-level personal establish partnerships

income. with source data

agencies to accelerate

data availability.

Begin work to identify

new computer processes

to reduce processing

time frame. Initiate

research into revised

BEA economic areas.

Implement Results of Begin research with Implement procedures

Stock Options BLS to develop ways to to estimate items that

Research identify and estimate are not recorded in

items that are not the ES-202 wage data

recorded in the ES-202 for selected states.

wage data for selected

states.

Prepare State Capital Experimental estimates Experimental estimates

Stocks of nonmanufacturing of capital stocks

capital stocks. using IRS asset data.

Prepare Pensions Release addendum table Investigate alter-

Received by State to SPI, removing native data sources to

pension contributions get more precise

and savings currently estimates of the

included in personal receipt of pension

income and adding income by geography.

pension distributions

to individuals.

Continue research into

what should be

included as pension

distributions.

Coordinate results

within BEA. If

research results

acceptable, prepare

proposal for change in

comprehensive

revision.

Interagency Work– Research use of ACS Evaluate ACS results

NAICS, North American results on a regular as basis for journey-

Product Classi- basis. Continue ECPC to-work estimates.

fication System staff work. Continue ECPC staff

(NAPCS), American work.

Community Survey

(ACS)

Bottom-up Estimate of Investigate the If data exits, develop

State and Local Taxes feasibility of methodology, database,

producing bottom-up and estimation

estimates of property software and produce

taxes by industry. experimental estimates

Review available of property taxes by

source data. Contact State and industry

State representatives derived from State

for information on source data.

unpublished source

data. If data exits, develop

methodology, database,

Investigate the and estimation

feasibility of software and produce

producing bottom-up experimental estimates

estimates of local of local government

government personal taxes by State derived

taxes. Review from State source

available source data.

data. Contact State

representatives for

information on un-

published source data.

Bottom-up Estimate of Conduct research to Evaluate State program

Temporary Assistance identify State maintenance of effort

for Needy Families programs used in data for definitional

(TANF) Components maintenance-of-effort differences and adjust

reports by States to accordingly. Document

TANF. Coordinate results and coordinate

results within BEA. efforts within BEA.

Improve Consistency Consult with represen- Develop data and

of I-O, GDP, and GSSP tatives from IED and computer software

NIWD on issues related needed to implement

to improving consis- changes. Produce

tency between State preliminary GSP

and national estimates estimates based on

of value added by consistency

industry. improvements.

Programs 2005

Annual/Benchmark Prepare SPI with NAICS 2002

State Personal industries. Complete

Income (SPI) comprehensive revisions.

Including Disposable

SPI

Annual/Benchmark GSP Prepare annual 2003 GSP

estimates on NAICS basis only.

Quarterly SPI Prepare quarterly SPI with

NAICS 2002 industries.

Complete comprehensive

revisions.

Annual and Benchmark Prepare LAPI with NAICS 2002

Local Area Personal industries. Complete

Income (LAPI) comprehensive revisions.

Regional Input-Output Incorporate commodity flow

Multipliers survey estimates.

Implement NAICS- GSP estimates on NAICS basis.

Regional Program

New Initiatives

Accelerate Produce and release accelerated

Metropolitan Area estimates of preliminary annual

Personal Income MAPI. Continue investigation

(MAPI) of disposable MAPI.

Accelerate GSP Implement advance 2003 GSP

for total and 1-digit industries.

Begin investigating bottom-up

estimates of metropolitan

statistical area and BEA

economic area gross product.

Accelerate Country- Work on new sources and

Level Personal Income methods for producing selected

components of personal

income. Identify new computer

processes to reduce processing

time frame. Develop new BEA

economic areas.

Implement Results of Produce regular estimates of

Stock Options items that are not recorded in

Research ES-202 wage data.

Prepare State Capital Evaluation of experimental

Stocks capital stock estimates.

Prepare Pensions Produce regular estimates of

Received by State pensions received by geography.

Interagency Work– Continue ECPC staff work on

NAICS, North American NAICS and NAPCS.

Product Classi-

fication System

(NAPCS), American

Community Survey

(ACS)

Bottom-up Estimate of Implement bottom-up

State and Local Taxes estimates of property taxes by

State and industry.

Implement bottom-up

estimates of local government

taxes by State.

Bottom-up Estimate of Evaluate potential of regular

Temporary Assistance bottom-up estimates of TANF

for Needy Families components.

(TANF) Components

Improve Consistency Implement changes into the

of I-O, GDP, and GSSP GSP estimates that are

consistent with improvements

made in the national GDP-by-

industry and I-O estimates.

SOURCE DATA IMPROVEMENT

Programs and New Initiatives: FY 2001-2005

Programs 2001 2002

Expansion of Meetings with BLS Continue discussions

Coverage of BLS about expanding the with BLS about

Current Employment definition of income expanding definition

Survey (CES) 790 to cover all earnings to all employees’

Program and wages with a BLS hours and earnings

tentative target date concept.

for completion of

2005.

Improve Timeliness of Discussed need to Continue to work with

BLS 202 Program improve timeliness of BLS as they work with

202 employment and the State reporters to

wage data. improve timeliness of

the BLS 202 program.

Work with the Bureau Worked with Census Work with Census’s

of the Census to staff to expand the Manufacturing and

Improve Data Quality detail expenses Construction Division

and Timeliness and to collected for 2002 staff to add expense

Expand the Number of Business Expenditures items to the 2002

Intermediate Inputs Survey, and Economic Census forms

Collected by Industry Auxiliaries in the for mining,

Economic Census. manufacturing, and

construction.

Expand Other Economic Working with Census’s Work with Census’s

Census and Survey Governments Division Governments Division

Programs to set BEA data to set BEA data

priorities while they priorities.

“retool” their

processing system Continue working with

resulted in improved Census to expand SAS.

timeliness and quality

of data.

Worked with Census to

expand Service Annual

Survey (SAS).

Programs 2003 2004

Expansion of Continue discussions Continue discussions

Coverage of BLS with BLS about with BLS about

Current Employment expanding definition expanding definition

Survey (CES) 790 to all employees’ to all employees’

Program hours and earnings hours and earnings

concept. Explore the concept.

impact of CES

probability sample

design on revisions to

BEA wage and salary

estimates.

Improve Timeliness of Continue to work with Continue to work with

BLS 202 Program BLS to improve time- BLS to improve time-

liness, which will liness, which will

result in more timely result in more timely

release of quarterly release of quarterly

SPI and annual LAPI. SPI and annual LAPI.

Work with the Bureau Hold meetings with Begin review of initial

of the Census to Census divisions to data releases from 2002

Improve Data Quality discuss progress of Economic Census to get

and Timeliness and to 2002 Economic Census early indication of

Expand the Number of and potential requests impact on our

Intermediate Inputs for new special programs.

Collected by Industry tabulations as needed.

Expand Other Economic Work with Census’s Work with Census’s

Census and Survey Governments Division Governments Division

Programs to set BEA data to set BEA data

priorities. priorities.

Continue working with Continue working with

Census to expand SAS. Census to expand SAS.

Programs 2005

Expansion of Begin integration of BLS

Coverage of BLS expansion of CES to all

Current Employment employees’ hours and earnings

Survey (CES) 790 concept.

Program

Improve Timeliness of Continue to work with BLS to

BLS 202 Program improve timeliness, which will

result in more timely release of

quarterly SPI and annual LAPI.

Work with the Bureau Begin work with Census on

of the Census to questionnaire review for the

Improve Data Quality 2007 Economic Census to

and Timeliness and to ensure our data needs are

Expand the Number of communicated.

Intermediate Inputs

Collected by Industry

Expand Other Economic Work with Census’s

Census and Survey Governments Division to set

Programs BEA data priorities.

Continue working with Census

to expand SAS.

MANAGEMENT

Programs and New Initiatives: FY 2001-2005

Programs 2001 2002

Recruit, Develop and Evaluated effective- Increase effectiveness

Retain a High- ness of employment of recruitment and

Quality, Diverse practices and training retention through use

Workforce program. of supplemental

programs. Develop

comprehensive work-

force training

programs to include a

BEA new employee

orientation program.

Conduct employee

survey, publish, and

act on results.

Examine impact of

anticipated

retirements.

Know, Understand, and Increased outreach Begin redesign of Web

Respond Better to efforts to all site. Conduct customer

Customers, Partners, customers, stake- survey. Identify

and Survey holders, and partners. specific actions for

Respondents increased outreach.

Begin one-pager press

releases. Hold annual

users’ conference.

Enhance BEA’s Worked with ESA staff Establish external

Ability to Tell on budget and external affairs function and

Budget Story to affairs. Prepared budget staff capa-

Stakeholders detailed, bottom-up bility. Deploy

budget for FY 2003. operating budgets

managed by personnel

costs.

Improve and Expand Began implementation Work with OCIO and

the Availability and of new software to program offices to

Usefulness of the streamline and create a unified data

Publication of automate preparation dissemination archi-

BEA’s Statistical of tables for tecture to facilitate

Information in Print, publication. publication of data in

for Electronic Media, printed and electronic

and on the Web formats. Update

standards and proce-

dures for submitting

material for

publication. Initiate

redesign of the SURVEY

and other publications

for the electronic

age.

Improve Financial Provided BEA managers Increase usefulness of

Management at BEA with financial data financial data by

necessary to manage beginning development

programs. of activity-based cost

system.

Office of Chief Information Officer

Maintain Voice Maintained voice mail Maintained voice mail

Communications system. system.

Maintained phone Maintained phone

system. system.

Major Projects Upgraded secretarial

phone systems.

Maintain Local Area Maintained hardware, Maintained hardware,

Network system software, system software,

backup systems. backup systems.

Monitored operations. Monitor operations 24

hours a day.

Installed Bindview

software to administer Administer user

accounts. accounts.

Major Projects Upgraded servers to Upgrade network backup

NetWare 5.1 OS. systems.

Analyzed and procured Upgrade network hub,

new firewalls and VPN. switches, and routers.

Upgraded backup Implement FAME server.

software–ArcServe

6.6. Implement Storage Area

Network (SAN)

Upgraded Intranet capability.

hardware.

Upgrade our network CD

Redesigned BEA Test delivery service.

LAN.

Investigate new OS.

Implemented OECD data

link. Investigate server

consolidation/

clustering services as

part of OS upgrade.

Upgrade to SQL 2000.

Upgrade to Windows

2000 Server.

Investigate use of

collaborative work

flow application.

Maintain Workstations Maintained desktop Maintain desktop

hardware/software hardware and software

support. support.

Upgraded 260 desktop Replace 150

workstations. workstations.

Installed 15 new Replace network and

personal printers and personal printers.

6 network printers.

Replace laptop

Installed Zenworks for computers.

Desktops to facilitate

software installs.

Major Projects Upgraded to Windows Upgrade Office

2000. Automation Suite.

Upgraded COTS Upgrade COTS software.

software.

Develop Software Asset

Completed analysis for Management Systems.

Aremos replacement and

procurement of FAME

software.

Provide Applications Maintained and Maintain and support

Development Support supported program applications program

office and adminis- office.

trative systems.

Maintain and support

Maintained and administrative

supported econometric systems.

software.

Maintain and support

Maintained and BEA Web applications.

supported Microsoft

SQL server software. Maintain and support

econometric software.

Maintain and support

database software.

Continue support for

data conversion.

Major Projects Completed functional Redesign centralized

requirements for NIPA NIPA processing

IT modernization. systems.

Implemented NIPA Implement Web

Tables Web applications for IED

Application. and BPD.

Implemented NIPA Enhance Web

database for Pattern applications for NIWD.

Stream table

production. Continue to implement

electronic reporting

Implemented electronic for BEA surveys

reporting for BE-577 (ASTAR).

and BE-605 and design

for BE-40. Redesign BPD Quarterly

Processing System.

Implemented GDP-by-

Industry System. Begin IID system Re-

engineering (COBOL

Completed Major systems).

Components of Bench-

mark I-O System. Implement Web Mapping

for Regional Division.

Completed prototype of Implement SQL2000.

IED Web system and BPD

Web system. Conversion to FAME.

Upgraded Private Upgrade Cold Fusion

Capital system. Servers.

Completed analysis for

Aremos replacement and

procurement of FAME

software.

Provide Information Developed and Develop and implement

Technology (IT) implemented 2000-2001 annual IT training

Training for BEA annual IT training plan.

Staff plan.

Conduct IT training

Provided for 120 IT courses.

training sessions for

users. Conduct security

refresher training.

Conducted security

refresher training.

Major Projects Upgraded Cyber

Learning online

training capabilities.

Provide HelpDesk Provided 7:30AM- Provide 7:30 AM-

Support 5:30 PM HelpDesk 5:30 PM HelpDesk

support. support.

Major Projects Enhanced Help Desk Provide user interface

Tracking system. to Help Desk tracking

system.

Investigate ways to

enhance HelpDesk

Support.

Review and update

existing IT documen-

tation on Intranet.

Maintain BEA’s Web Provided 24-hour Web Provided 24-hour Web

site hardware and software hardware and software

support. support.

Major Projects Upgraded reporting Complete Firewall

software. upgrades.

Installed database Investigate hot fail-

capabilities including over services for Web

hardware. site.

Deploy Plans and Updated Strategic Update Strategic

Politics Information Technology Information Technology

Plan. Plan.

Provided IT project Provide IT project

management oversight management oversight.

for NIPA modernization

and Web site Provide IT budgetary

development. oversight.

Prepared FY 2003 IT Update Operational IT

budgets. Plans.

Updated Operational IT Update IT

Plans. architecture.

Updated IT Update Security Plans.

architecture.

Liaison with DOC CIO.

Updated six Security

Plans. Issue Software

Development standards.

Revised all 11

Security Plans for new Implement DOC IT

NIST standards. management,

restructuring.

Completed GAO, NSA,

and GISRA Security Create BEA Technical

Reviews. Reference Model.

Participated on DOC Enforce SAT standards.

CIO Security Task

Force. Develop e-mail

Standard Operating

Implemented Software Procedure.

Development Life Cycle

Standards, Data Base

Standards and

Configuration

Management Standards.

Implemented DOC IT

management,

restructuring plan.

Updated BEA Technical

Reference Model.

Maintain IT Security Update security plans.

Conduct IT security

refresher training.

Monitor Computer

Incident Response

Team.

Monitor Department of

Commerce IT security

initiatives and

requests for

information.

Programs 2003 2004

Recruit, Develop and Put in place Evaluate effectiveness

Retain a High- succession planning. of recruitment and

Quality, Diverse Act on results of retention efforts.

Workforce employee survey. Develop measures for

Continue use of further improvement.

recruitment and Conduct employee

retention supplemental survey, publish, and

programs. Evaluate act on results.

training program and

develop measures for

further improvements.

Know, Understand, and Continue with Conduct customer

Respond Better to increased outreach survey. Evaluate Web

Customers, Partners, efforts to all site for effective-

and Survey customers, stake- ness. Develop additio-

Respondents holders, and partners. nal measures for in-

Conduct customer creased outreach

survey. Hold annual efforts. Hold annual

users’ conference. users’ conference.

Enhance BEA’s Continue with bottom- Seek additional

Ability to Tell up development of measures for improving

Budget Story to detailed operating and communicating

Stakeholders budget. improvements to BEA

financial management.

Improve and Expand Assess scope and Enhance presentation

the Availability and effectiveness of BEA’s of the SURVEY and

Usefulness of the dissemination other publications on

Publication of activities across the Web. Identify and

BEA’s Statistical program areas. implement specific

Information in Print, Implement publication improvements in

for Electronic Media, design improvements. response to customer

and on the Web Assess desirability feedback.

and feasibility of

reviewing electronic

products and Web

postings.

Improve Financial Implement an activity- Provide BEA managers

Management at BEA based cost system. with financial data

Provide product cost necessary to manage

information to programs.

managers.

Office of Chief Information Officer

Maintain Voice Maintained voice mail Maintained voice mail

Communications system. system.

Maintained phone Maintained phone

system. system.

Major Projects Replace phone system.

Replace voice mail

system.

Maintain Local Area Maintain hardware, Maintain hardware,

Network system software, system software,

backup systems. backup systems.

Monitor operations 24 Monitor operations 24

hours a day. hours a day.

Administer user Administer user

accounts. accounts.

Major Projects Replace file servers. Upgrade database

operation systems.

Investigate and

implement new Implement new OS.

operating systems.

Upgrade firewalls.

Upgrade e-mail system.

Evaluate integrity of

Implement SAN building wiring.

capability.

Maintain Workstations Maintain desktop Maintain desktop

hardware and software hardware and software

support. support.

Replace 150 Replace 150

workstations. workstations.

Replace network and Replace network and

personal printers. personal printers.

Replace laptop

computers.

Major Projects Upgrade Office Upgrade desktop

Automation Suite. operating system.

Upgrade COTS software. Upgrade COTS software.

Upgrade desktop

software management

system.

Upgrade virus

protection software.

Provide Applications Maintain and support Maintain and support

Development Support applications program program office

office. applications.

Maintain and support Maintain and support

administrative administrative

systems. systems.

Maintain and support Maintain and support

BEA Web applications. BEA Web applications.

Maintain and support Maintain and support

econometric software. econometric software.

Maintain and support Maintain and support

database software. database software.

Continue support for Continue support for

data conversion. data conversion.

Major Projects NIPA IT modernization. NIPA IT modernization.

Upgrade Web Upgrade Web

Applications. Applications.

Upgrade electronic BPD and IID system Re-

reporting. engineering.

BPD and IID system Re- GDP-by-Industry system

engineering. Re-engineering.

GDP-by-Industry system Annual/Benchmark I-O

Re-engineering. system Re-engineering.

Annual/Benchmark I-O Re-engineer to

system Re-engineering. generate more timely

data.

Re-engineer to

generate more timely Re-engineer to

data. incorporate NAICS.

Re-engineer to Continue conversion to

incorporate NAICS. FAME.

Continue conversion to Begin regional system

FAME. Re-engineering.

Provide Information Develop and implement Develop and implement

Technology (IT) annual IT training annual IT training

Training for BEA plan. plan.

Staff

Conduct IT training Conduct IT training

courses. courses.

Conduct security Conduct security

refresher training. refresher training.

Major Projects Upgrade online

training capabilities.

Provide HelpDesk Provide 7:30 AM- Provide 7:30 AM-

Support 5:30 PM HelpDesk 5:30 PM HelpDesk

support. support.

Major Projects Review and update Review and update

existing IT existing IT

documentation on documentation on

Intranet. Intranet.

Maintain BEA’s Web Provide 24-hour Web Provide 24-hour Web

site hardware and software hardware and software

support. support.

Major Projects Upgrade Security Upgrade Security

infrastructure. infrastructure.

Upgrade telecommuting

infrastructure.

Deploy Plans and Update Strategic Update Strategic

Politics Information Technology Information Technology

Plan. Plan.

Provide IT project Provide IT project

management oversight. management oversight.

Provide IT budgetary Provide IT budgetary

oversight. oversight.

Update Operational IT Update Operational IT

Plans. Plans.

Update IT Update IT

architecture. architecture.

Update Security Plans. Update Security Plans.

Liaison with DOC CIO. Liaison with DOC CIO.

Issue Software Issue Software

Development standards. Development standards.

Oversee DOC IT Oversee DOC IT

management, management

restructuring. restructuring.

Create BEA Technical Create BEA Technical

Reference Model. Reference Model.

Enforce SAT standards. Enforce SAT standards.

Maintain IT Security Update security plans. Update security plans.

Conduct IT security Conduct IT security

refresher training. refresher training.

Monitor Computer Monitor Computer

Incident Response Incident Response

Team. Team.

Monitor Department of Monitor Department of

Commerce IT security Commerce IT security

initiatives and initiatives and

requests for requests for

information. information.

Programs 2005

Recruit, Develop and Increase effectiveness of

Retain a High- recruitment and retention

Quality, Diverse through use of various

Workforce supplemental programs. Train

workforce to meet current and

future challenges. Seek avenues

for increased employee

satisfaction.

Know, Understand, and Increase outreach efforts to all

Respond Better to customers, stakeholders and

Customers, Partners, partners. Conduct customer

and Survey survey. Hold annual users’

Respondents conference.

Enhance BEA’s Conduct comprehensive

Ability to Tell evaluation of external affairs

Budget Story to and budget functions. Act on

Stakeholders results of evaluation.

Improve and Expand Conduct comprehensive

the Availability and evaluation of BEA

Usefulness of the dissemination program. Initiate

Publication of further actions based on this

BEA’s Statistical evaluation.

Information in Print,

for Electronic Media,

and on the Web

Improve Financial Conduct comprehensive

Management at BEA analysis of BEA financial

management and seek measures

for improvement.

Office of Chief Information Officer

Maintain Voice Maintain voice mail system.

Communications

Maintain phone system.

Major Projects

Maintain Local Area Maintain hardware, system

Network software, backup systems.

Monitor operations 24 hours a

day.

Administer user accounts.

Major Projects Upgrade network backup

systems.

Upgrade network hub, switches,

and routers.

Maintain Workstations Maintain desktop hardware and

software support.

Replace 150 workstations.

Replace network and personal

printers.

Major Projects Upgrade desktop operating

system.

Upgrade COTS software.

Upgrade desktop software

management system.

Upgrade virus protection

software.

Provide Applications Maintain and support program

Development Support office applications.

Maintain and support

administrative systems.

Maintain and support BEA Web

applications.

Maintain and support

econometric software.

Maintain and support database

software.

Continue support for data

conversion.

Major Projects NIPA IT modernization.

Upgrade Web Applications.

BPD and IID system Re-

engineering.

GDP-by-Industry system Re-

engineering.

Annual/Benchmark I-O system

Re-engineering.

Regional system Re-

engineering.

Provide Information Develop and implement annual

Technology (IT) IT training plan.

Training for BEA

Staff Conduct IT training courses.

Conduct security refresher

training.

Major Projects Upgrade online training

capabilities.

Provide HelpDesk Provide 7:30 AM-5:30 PM

Support HelpDesk support.

Major Projects Review and update existing IT

documentation on Intranet.

Maintain BEA’s Web Provide 24-hour Web hardware

site and software support.

Major Projects Upgrade Security

infrastructure.

Deploy Plans and Update Strategic Information

Politics Technology Plan.

Provide IT project management

oversight.

Provide IT budgetary oversight.

Update Operational IT Plans.

Update IT architecture.

Update Security Plans.

Liaison with DOC CIO.

Issue Software Development

standards.

Oversee DOC IT management

restructuring.

Create BEA Technical Reference

Model.

Enforce SAT standards.

Maintain IT Security Update security plans.

Conduct IT security refresher

training.

Monitor Computer Incident

Response Team.

Monitor Department of

Commerce IT security

initiatives and requests for

information.

BLS Bureau of Labor Statistics

BPD Balance of Payments Division

CBAD Current Business Analysis Division

GD Government Division

IED Industry Economics Division

IMF International Monetary Fund

IRS Internal Revenue Service

NIWD National Income and Wealth Division

NIH National Institutes of Health

OCIO Office of the Chief Information Officer

OECD Organisation for Economic Co-operation and Development

OMB Office of Management and Budget

REMD Regional Economic Measurement Division

(1.) See “BEA’s Preliminary Strategic Plan for 2001-2005,” SURVEY OF CURRENT BUSINESS (December 2001): 23-39.

(2.) A useful recent review of issues and potential improvements in constructing price indexes is contained in Charles Schultze and Christopher Mackie, eds., At What Price?: Conceptualizing and Measuring Cost-of-Living and Price Indexes, National Academy Press, Washington, DC, 2001.

(3.) A discussion of the pattern of output and other cyclical indicators along with a comparison with other postwar recessions is contained in William Nordhaus, “Puzzles About the American Economy in the Current Recession and Recovery,” forthcoming, Brookings Papers on Economic Activity, 2002:1. A draft of the paper is available at .

(4.) The SNA, developed under the aegis of the United Nations and other international agencies, is a set of concepts, definitions, classifications and accounting rules. The latest SNA is from 1993 and can be found at .

(5.) The Jorgenson set of accounts is described in Barbara Fraumeni, “The Jorgenson System of National Accounting” in Lawrence J. Lau, ed., Econometrics and the Cost of Capital: Essays in Honor of Dale W. Jorgenson, MIT Press, Cambridge, Massachusetts, 1999.

(6.) William G. Gale and John Sabelhaus, “Perspectives on the Household Saving Rate,” Brookings Papers on Economic Activity, 1999:1.

(7.) Annamaria Lusardi, Jonathan Skinner, and Steven Venti, “Saving Puzzles and Saving Policies in the United States,” Dartmouth College Working Paper 01-04, February 2001.

(8.) See Robert Eisner, “Extended accounts for national income and product,” Journal of Economic Literature, December 1988, 26:1611-1684, Table S.5 for comparisons of market and comprehensive income and saving measures.

(9.) Dale W. Jorgenson and Barbara M. Fraumeni, “Investment in Education and U.S. Economic Growth,” Scandinavian Journal of Economics, 1992, Supplement, pp. 51-70.

(10.) “Integrated Economic and Environmental Satellite Accounts,” SURVEY (April 1994), pp. 33-49.

(11.) United States Environmental Protection Agency, The Benefits and Costs of the Clean Air Act, 1970 to 1990, Washington, D.C., Office of Air and Radiation/Office of Policy Analysis and Review/Office of Policy, Planning, and Evaluation, April, 1997.

(12.) See Nordhaus, William D. and Edward Kokkelenberg, eds., Nature’s Numbers: Expanding the National Economic Accounts to Include the Environment: Report of the Panel on Integrated Environmental and Economic Accounting, Washington, D.C., National Academy Press, 1999; see also the November 1999, February 2000, and March 2000 issues of the SURVEY OF CURRENT BUSINESS for reprints of three chapters from Nature’s Numbers.

(13.) See Diane Herz and Richard M. Devens, Jr., “The American Time-Use Survey,” Industrial Relations, Volume 40, No. 3, July 2001.

(14.) See the discussion in William Nordhaus, “New Directions in National Economic Accounting,” American Economic Review, May 2001, which extends the results from Jesse H. Ausubel and Arnulf Gruebler, “Working Less and Living Longer: Long-term Trends in Working Time and Time Budgets,” Technological Forecasting and Social Change, 1995, pp. 113-131.

(15.) Nordhaus, William D. “The Health of Nations: The Contribution of Improved Health to Living Standards,” forthcoming in Kevin M. Murphy and Robert H. Topel, eds. Exceptional Returns: The Economic Value of America’s Investment in Medical Research, University of Chicago Press, available at .

COPYRIGHT 2002 U.S. Government Printing Office

COPYRIGHT 2004 Gale Group