TREATMENT OF GOVERNMENT ACTIVITY ON THE PRODUCTION ACCOUNT

Utz P. Reich

Review of Income and Wealth, 1986, vol. 32, issue 1, 69-85

Abstract: This paper is the concluding part of a project described in an earlier paper in this journal.1 The conceptual partition of government services into intermediate, individual and collective consumption is connected to the framework of the SNA and ESA. The paper shows how elements from both systems can be welded together in order to describe government productive activity more clearly within the general make‐use matrix approach. After an attempt to clarify some of the existing terminology, figures are presented which show that the partition is feasible, in principle. The data also support the necessity of distinguishing between individual and collective consumption of government services leading to the concept of total individual consumption. Finally, the paper concludes that intermediate use, if properly defined, should be introduced as a subcategory of government consumption, but not subtracted at present from GDP.

Date: 1986
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