PROBLEMS OF DETERMINING AND MEASURING THE RELIABILITY OF THE NATIONAL ACCOUNTS: HUNGARY'S EXPERIENCES

J. Árvay

Review of Income and Wealth, 1974, vol. 20, issue 1, 55-69

Abstract: Economic realities can be described in national accounting only by certain approximative means and presumptions; therefore they cannot be measured with absolute accuracy. However, because of their great importance these investigations must fulfil as far as possible the reliability required for the economic control and planning of the national economy, in accordance with predetermined concepts and methods. The reliability of national accounting is favourable in Hungary, as they are based mostly (92 percent) on the bookkeeping data of enterprises, cooperatives and institutions. The bookkeeping system is uniform in all economic organizations, in conformity with central regulations, and it takes into account the demand of computations for national accounting. Despite these favourable conditions lesser or greater contradictions can be found in the national accounts every year. The absolute measure of the differences is not significant; however, if compared to the annual increase it results in uncertainty of 15 percent. The uncertainty is reduced by the fact that the sign of differences is the same every year. The author classifies the causes of uncertainty in national accounts into four groups: 1. problems of the time shift of the connected economic processes and of their accounting; 2. effect of the enterprise interests; 3. inadequacy of methodological regulation; 4. inaccuracy of data surveys and processing. The study deals with the special factors of inaccuracy occurring in constant price accounting. Inaccuracy of the most important aggregates, for instance that of the volume index of the national income, comes to 0.5‐0.7 percent which results, in the case of a yearly 5 percent “real” increase in the index, in reliability limits of 10 to 15 percent. In the concluding part of the study the author points out that in Hungary the unexplored contradictions are not shown as “statistical discrepancy” but they are included in the various aggregates on the basis of considerations discussed in the study.

Date: 1974
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