Economic Statistics Centre of Excellence – helping ONS measure the fast-changing, modern economy

A new article published by ESCoE today, looking at how much trade in goods asymmetries affect different countries, was welcomed by the Office for National Statistics (ONS). Trade asymmetries are an international phenomenon where different countries’ trade balances do not tally with each other. Today’s article shows that the sizes of the UK’s trade asymmetries are, on average, lower than other comparable nations.

The Economic Statistics Centre of Excellence, an independent research centre based at the National Institute for Economic and Social Research (NIESR) delivered in collaboration with ONS, was recommended in the Bean Review to help ONS statisticians and economists partner with academic experts from around the world to help solve the challenges of measuring the modern and digital economy.

Today’s article: ‘Reconciled Trade Flow Estimates Using an FGLS [feasible generalised least squares] Estimator’ is a technical study by Dr. Thomas Baranga of Harvard University, funded by ONS, investigating UN data on international trade to better understand why two countries may have differing estimates of the same flow of goods. This report identifies some trade relationships where ONS can work with its international partners to better understand differences, but generally shows that “the UK measures its trade relatively accurately”. This article complements work already conducted by ONS to identify the size of, and reasons behind, UK trade asymmetries.

Richard Heys, ONS Deputy Chief Economist said: “The Economic Statistics Centre of Excellence, including its network of collaborating authors, is blazing a trail to help improve our understanding of the modern economy. Research such as this is vital to support our work to transform the UK’s economic statistics, but also shows that often these statistics are already comparable in quality to those of other nations.” Today’s article follows other recent publications, including a recent article looking at how to improve the measuring of changing prices in industries with fast-changing technologies, such as telecommunications. Details of these articles follow.

‘A Comparison of Approaches to Deflating Telecoms Services Output’ is a methodological paper delivered by a combination of academic and sector experts, Prof. Diane Coyle (ONS Fellow) and Prof. Will Stewart, along with ONS staff Mohamed Abdirahman and Richard Heys to identify new methods to measure price change in the telecommunications services sector. This paper is contributing to work to implement changes to the national accounts planned for inclusion in the 2019 ONS Blue Book.

‘Measuring the “Free” Digital Economy within the GDP and Productivity Accounts’ is a paper delivered by staff from the Federal Reserve Bank of Philadelphia, and the US Bureau of Economic Analysis (BEA), including Leonard Nakamura, Jon Samuels, and Rachel Soloveichik in support of their recent visits to the UK to participate in ESCoE events, which presents a method to measure the value to consumers of free digital content, a key issue raised in the Bean Review. This work has been republished by ESCoE to widen debate on this topic.

‘The Mystery of TFP [total factor productivity]’ is a technical study by Prof Nick Oulton, ONS Fellow, which investigates why all countries’ resources have been shifting away from industries with high productivity growth towards industries with low productivity growth.

‘Do-it-yourself digital: the production boundary and the productivity puzzle’ is a methodological paper by Prof. Diane Coyle looking into the range of potential measurement issues arising from digital innovations. It also specifically considers digitally-enabled substitutions in activity from the household into the production (GDP) account, and the other way around.

The ESCoE’s ambitious research agenda will continue to grow in the coming months, and will include research “democratic” measures of income growth, timely production of regional output data, and the use of online job adverts to classify occupations. Research by the ESCoE will also be presented at a forthcoming conference on 16 to 17 May 2018 on Economic Measurement delivered by ESCoE, in partnership with ONS and the Bank of England. Keynote speakers will include Prof. Hal Varian (Chief Economist – Google) and Prof. Nicholas Bloom (Stanford University and ESCoE).

Background notes:

  1. All the papers published by ESCoE.
  2. Today’s article on trade in goods asymmetries (PDF, 1.1MB).

Media contacts:

Paola Buonadonna, NIESR’s Head of Communications

Telephone: 2017 6541923

Email: p.buonadonna@niesr.ac.uk

Friday, January 12, 2018

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