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41-438: Heterodox National accounts or national account systems ( NAS ) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry accounting . By design, such accounting makes the totals on both sides of an account equal even though they each measure different characteristics, for example production and

82-559: A planned economy , central planners decide how land, labor, and capital should be used to provide for maximum benefit for all citizens. Just as with market entrepreneurs, the benefits may mostly accrue to the entrepreneurs themselves. The sociologist C. Wright Mills refers to "new entrepreneurs" who work within and between corporate and government bureaucracies in new and different ways. Others (such as those practicing public choice theory ) refer to " political entrepreneurs ", i.e., politicians and other actors. Much controversy rages about

123-457: A scientific nature or to obtain a desired material or product . Scientific techniques can be divided in many different groups, e.g.: In some cases these methods have evolved into instrumental techniques that require expensive equipment. This is particularly true in sciences like physics , chemistry , and astronomy . It is customary to abbreviate the names of techniques into acronyms, although this does not hold for all of them. Particularly

164-550: A change in the makeup of national accounts or adjustments in the formulation of public policy . The original motivation for the development of national accounts and the systematic measurement of employment was the need for accurate measures of aggregate economic activity. This was made more pressing by the Great Depression and as a basis for Keynesian macroeconomic stabilisation policy and wartime economic planning. The first efforts to develop such measures were undertaken in

205-450: A country or across to estimate different sources of growth, whether from growth of factor inputs or technological change . The accounts are derived from a wide variety of statistical source data including surveys , administrative and census data, and regulatory data, which are integrated and harmonized in the conceptual framework. They are usually compiled by national statistical offices and/or central banks in each country, though this

246-493: A number of aggregate measures in the national accounts, notably including gross domestic product or GDP , perhaps the most widely cited measure of aggregate economic activity. Ways of breaking down GDP include as types of income (wages, profits, etc.) or expenditure (consumption, investment/saving, etc.). Measures of these are examples of macro - economic data . Such aggregate measures and their change over time are generally of strongest interest to economic policymakers, although

287-507: Is a social accounting matrix with accounts in each respective row-column entry. National accounting has developed in tandem with macroeconomics from the 1930s with its relation of aggregate demand to total output through interaction of such broad expenditure categories as consumption and investment. Economic data from national accounts are also used for empirical analysis of economic growth and development . National accounts broadly present output, expenditure, and income activities of

328-419: Is not always the case, and may be released on both an annual and (less detailed) quarterly frequency. Practical issues include inaccuracies from differences between economic and accounting methodologies, lack of controlled experiments on quality of data from diverse sources, and measurement of intangibles and services of the banking and financial sectors. Two developments relevant to the national accounts since

369-470: Is not included in calculating gross domestic product (GDP). An Australian study has shown the value of this uncounted work to be approximately 50% of GDP, making its exclusion rather significant. As GDP is tied closely to the national accounts system, this may lead to a distorted view of national accounts. Because national accounts are widely used by governmental policy-makers in implementing controllable economic agendas, some analysts have advocated for either

410-684: Is not to be found in any of the literature of that time. Differences are most stark when it comes to deciding which factor is the most important. Physiocracy (from the Greek for "government of nature") is an economic theory developed by a group of 18th century Enlightenment French economists who believed that the wealth of nations was derived solely from the value of "land agriculture" or "land development" and that agricultural products should be highly priced. The classical economics of Adam Smith , David Ricardo , and their followers focus on physical resources in defining its factors of production and discuss

451-409: Is the method of valuing environmental assets , which are usually not counted in measuring national wealth, in part due to the difficulty of valuing them. The method has been proposed as an alternative to an implied zero valuation of environmental assets and as a way of measuring the sustainability of welfare levels in the presence of environmental degradation . Macro economic data not derived from

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492-442: The 1980s include the following. Generational accounting is a method for measuring redistribution of lifetime tax burdens across generations from social insurance , including social security and social health insurance . It has been proposed as a better guide to the sustainability of a fiscal policy than budget deficits , which reflect only taxes minus spending in the current year. Environmental or green national accounting

533-622: The United Nations published A System of National Accounts and Supporting Tables in 1952. International standards for national accounting are defined by the United Nations System of National Accounts , with the most recent version released for 2008. Even before that in early 1920s there were national economic accounts tables. One of such systems was called Balance of national economy and was used in USSR and other socialistic countries to measure

574-719: The advent of the computer has led to a true proliferation in the number of techniques to the point that few scientists still have a good overview over all that is available. See, for example, the list of materials analysis methods and Category:Scientific techniques . This science article is a stub . You can help Misplaced Pages by expanding it . Factors of production There are two types of factors: primary and secondary . The previously mentioned primary factors are land, labour and capital. Materials and energy are considered secondary factors in classical economics because they are obtained from land, labour, and capital. The primary factors facilitate production but neither become part of

615-407: The basis for earlier economists' labor theory of value . The hiring of labor power only results in the production of goods or services (" use-values ") when organized and regulated (often by the "management"). How much labor is actually done depends on the importance of conflict or tensions within the labor process. Neoclassical economics , one of the branches of mainstream economics , started with

656-410: The benefits produced by entrepreneurship. But the real issue is about how well institutions they operate in (markets, planning, bureaucracies, government) serve the public. This concerns such issues as the relative importance of market failure and government failure . In the book Accounting of Ideas , "intequity", a neologism , is abstracted from equity to add a newly researched production factor of

697-444: The capitalist system. Equity, which is regarded as part of capital, was divided into equity and intequity. Intequity means capital of ideas. Entrepreneurship was divided into network-related matters and creating-related matters. Network-related matters function in the sphere of equity, and creating-related matters in spheres of intequities. Ayres and Warr (2010) are among the economists who criticize orthodox economics for overlooking

738-425: The classical factors of production of land, labor, and capital. However, it developed an alternative theory of value and distribution. Many of its practitioners have added various further factors of production (see below). Further distinctions from classical and neoclassical microeconomics include the following: Ecological economics is an alternative to neoclassical economics . It integrates, among other things,

779-436: The classical perspective described above. But unlike the classical school and many economists today, Marx made a clear distinction between labor actually done and an individual's " labor power " or ability to work. Labor done is often referred to nowadays as "effort" or "labor services". Labor-power might be seen as a stock which can produce a flow of labor. Labor, not labor power, is the key factor of production for Marx and

820-511: The collective work that went into creating it. Kropotkin does not argue that the product of a worker's labor should belong to the worker. Instead, Kropotkin asserts that every individual product is essentially the work of everyone since every individual relies on the intellectual and physical labor of those who came before them as well as those who built the world around them. Because of this, Kropotkin proclaims that every human deserves an essential right to well-being because every human contributes to

861-432: The cultural inheritance is the property of all of us, without exception. Adam Smith , David Ricardo , and Karl Marx claimed that labor creates all value . While Douglas did not deny that all costs ultimately relate to labour charges of some sort (past or present), he denied that the present labour of the world creates all wealth. Douglas carefully distinguished between value , costs and prices . He claimed that one of

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902-440: The detailed national accounts contain a source of information for economic analysis, for example in the input-output tables which show how industries interact with each other in the production process. National accounts can be presented in nominal or real amounts , with real amounts adjusted to remove the effects of price changes over time. A corresponding price index can also be derived from national output. Rates of change of

943-426: The distribution of cost and value among these factors. Adam Smith and David Ricardo referred to the "component parts of price" as the costs of using: The classical economists also employed the word "capital" in reference to money. Money, however, was not considered to be a factor of production in the sense of capital stock since it is not used to directly produce any good. The return to loaned money or to loaned stock

984-429: The economic actors (households, corporations, government) in an economy, including their relations with other countries' economies, and their wealth (net worth). They present both flows (measured but it is over a period) and stocks (measured at the end of a period), ensuring that the flows are reconciled with the stocks. As to flows, the national income and product accounts (in U.S. terminology) provide estimates for

1025-540: The efficiency of socialistic production. In Europe, the worldwide System of National Accounts has been adapted in the European System of Accounts (ESA), which is applied by members of the European Union and many other European countries. Research on the subject continues from its beginnings through today. Scientific technique A scientific technique is any systematic way of obtaining information about

1066-455: The factors resulting in a misdirection of thought in terms of the nature and function of money was economists' near-obsession about values and their relation to prices and incomes. While Douglas recognized "value in use" as a legitimate theory of values, he also considered values as subjective and not capable of being measured in an objective manner. Peter Kropotkin argued for the common ownership of all intellectual and useful property due to

1107-436: The first and second laws of thermodynamics (see: Laws of thermodynamics ) to formulate more realistic economic systems that adhere to fundamental physical limitations. In addition to the neoclassical focus on efficient allocation, ecological economics emphasizes sustainability of scale and just distribution. Ecological economics also differ from neoclassical theories in its definitions of factors of production, replacing them with

1148-399: The following: Integral to ecological economics is the following notion: at the maximum rates of sustainable matter and energy uptake, the only way to increase productivity would be through an increase in design intelligence. This provides the basis for a core tenet of ecological economics, namely that infinite growth is impossible. In the first half of the 20th century, some authors added

1189-458: The fourth factor of production, with entrepreneurship as a form of human capital. Yet others refer to intellectual capital . More recently, many have begun to see "social capital" as a factor, as contributing to production of goods and services. In markets, entrepreneurs combine the other factors of production, land, labor, and capital, to make a profit. Often these entrepreneurs are seen as innovators, developing new ways to produce new products. In

1230-469: The income from it. As a method , the subject is termed national accounting or, more generally, social accounting . Stated otherwise, national accounts as systems may be distinguished from the economic data associated with those systems. While sharing many common principles with business accounting, national accounts are based on economic concepts. One conceptual construct for representing flows of all economic transactions that take place in an economy

1271-564: The late 1920s and 1930s, notably by Colin Clark and Simon Kuznets . Kuznets building on a project that was underway https://www.nber.org/system/files/chapters/c4231/c4231.pdf , Lillian Epstein had been involved in earlier studies. Richard Stone of the U.K. led later contributions during World War II and thereafter. The first formal national accounts were published by the United States in 1947. Many European countries followed shortly thereafter, and

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1312-437: The main national accounts include the following accounts for the economy as a whole and its main economic actors. The accounts may be measured as gross or net of consumption of fixed capital (a concept in national accounts similar to depreciation in business accounts). Notably absent from these components, however, is unpaid work , because its value is not included in any of the aforementioned categories of accounts, just as it

1353-540: The money value of income and output per year or quarter, including GDP . As to stocks, the 'capital accounts' are a balance-sheet approach that has assets on one side (including values of land, the capital stock, and financial assets) and liabilities and net worth on the other, measured as of the end of the accounting period. National accounts also include measures of the changes in assets, liabilities, and net worth per accounting period. These may refer to flow of funds accounts or, again, capital accounts . There are

1394-568: The national accounts are also of wide interest, for example some cost-of-living indexes , the unemployment rate , and the labor force participation rate . In some cases, a national-accounts counterpart of these may be estimated, such as a price index computed from the personal consumption expenditures and the GDP gap (the difference between observed GDP and potential GDP ). The presentation of national accounts data may vary by country (commonly, aggregate measures are given greatest prominence), however

1435-399: The overall state of technology is described as a factor of production. The number and definition of factors vary, depending on theoretical purpose, empirical emphasis, or school of economics . In the interpretation of the currently dominant view and of a of classical economic theory developed by neoclassical economists, the term "factors" did not exist until after the classical period and

1476-411: The price level and output may also be of interest. An inflation rate (growth rate of the price level) may be calculated for national output or its expenditure components. Economic growth rates (most commonly the growth rate of GDP) are generally measured in real (constant-price) terms. One use of economic-growth data from the national accounts is in growth accounting across longer periods of time for

1517-432: The product (as with raw materials ) nor become significantly transformed by the production process (as with fuel used to power machinery). Land includes not only the site of production but also natural resources above or below the soil . Recent usage has distinguished human capital (the stock of knowledge in the labor force ) from labour. Entrepreneurship is also sometimes considered a factor of production. Sometimes

1558-458: The role of natural resources and the effects of declining resource capital. See also: Natural resource economics Exercise can be seen as individual factor of production, with an elastication larger than labor. A cointegration analysis support results derived from linear exponential ( LINEX ) production functions. C. H. Douglas disagreed with classical economists who recognized only three factors of production. While Douglas did not deny

1599-425: The role of these factors in production, he considered the " Cultural heritage " as the primary factor. He defined cultural inheritance as the knowledge, techniques, and processes that have accrued to us incrementally from the origins of civilization (i.e., progress ). Consequently, mankind does not have to keep " reinventing the wheel ". "We are merely the administrators of that cultural inheritance, and to that extent,

1640-485: The work of organization or entrepreneurship as a fourth factor of production. This became standard in the post-war Neoclassical synthesis . For example, J. B. Clark saw the co-ordinating function in production and distribution as being served by entrepreneurs ; Frank Knight introduced managers who co-ordinate using their own money (financial capital) and the financial capital of others. In contrast, many economists today consider " human capital " (skills and education) as

1681-546: Was styled as interest while the return to the actual proprietor of capital stock (tools, etc.) was styled as profit. See also returns . Marx considered the "elementary factors of the labor-process" or " productive forces " to be: The "subject of labor" refers to natural resources and raw materials, including land. The "instruments of labor" are tools, in the broadest sense. They include factory buildings, infrastructure, and other human-made objects that facilitate labor's production of goods and services. This view seems similar to

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