- Abdessatar Ouanes, and Subhash Thakur
- Published Date:
- June 1997
Macroeconomic Accounting and Analysis in Transition Economies
Abdessatar Ouanes and Subhash Thakur
With contributions from
International Monetary Fund
© 1997 International Monetary Fund
Composition: Alicia Etchebarne-Bourdin
Cover and Charts: Sanaa Elaroussi and IMF Graphics Section
Macroeconomic accounting and analysis in transition economies / Abdessatar Ouanes and Subhash Thakur with contributions from Ian Lienert, Philippe Marciniak, Karen Swiderski — [Washington, D.C.] : International Monetary Fund, 1997.
1. National income — Poland — Accounting. 2. Poland — Economic policy — 1990- I. Thakur, Subhash Madhav, 1946-
HC340.3.Z9 1516 1997.
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The following symbols have been used throughout this book:
… to indicate that data are not available;
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
between years or months (e.g., 1994-95 or January-June) to indicate the years or months covered, including the beginning and ending years or months;
/ between years (e.g., 1994/95) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
The term “country,” as used in this book, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.
This volume presents the principal elements of macroeconomic accounting and analysis for a transition economy, using a case study of Poland for purposes of illustration. The primary aim of the volume is to provide officials from transition economies participating in the training courses offered by the IMF Institute with a practitioner’s guidebook to the core macroeconomic ideas which underlie formulation of economic policies and to provide him or her with directions for a further in-depth exploration of issues. With the latter aim, the volume includes several references for further reading in the core areas covered. Thus, although the primary target audience of the book is that of officials from countries in transition, the bulk of the material can be used by officials and analysts from any country as a guidebook for the main elements of macroeconomic accounting and analysis. The volume covers accounting and analysis for the real, fiscal, monetary, and external sectors as well as the interrelations among these sectors (the flow of funds). The analyses are based on the most up-to-date accounting methodology, primarily the 1993 System of National Accounts and the Fifth Edition of the Balance of Payments Manual (1993), and include a discussion of the differences between the new accounting system and its predecessors. The choice of Poland to illustrate the macroeconomics of a transition economy reflects a number of considerations: Poland’s pioneering role among East European economies in instituting comprehensive economic reforms; the widespread attention the Polish economic program invited as a model of the so-called "big bang" approach to reform; the IMF’s role in supporting this program with financing and policy advice; the commonality of the issues Poland and other transition economies face; and finally, the availability of data for the Polish economy in recent years.
The design of the volume was motivated by the IMF Institute’s efforts to meet the unique needs of officials from IMF member countries in transition for training in policy-oriented macroeconomic analysis. The material also reflects the Institute’s recent efforts to integrate its training activities more closely with the work of other departments of the IMF.
Although a knowledge of the specific institutional, historical, and social conditions in the country is obviously a helpful supplement to a purely economic analysis, the principles of macroeconomic analysis presented here are general and have been found to be robust in a variety of country situations. These principles are grounded in macroeconomic accounting as it is applied to market economies, and a clear understanding of the main accounting concepts used in the classification and presentation of economic statistics is an essential prerequisite to applying them.
Chapter 1 presents a brief overview of economic developments and policies in Poland, while Chapter 2, Analysis of the Real Sector, introduces the basic accounting relationships in the real sector and highlights key analytical tools used in the measurement of output, inflation, wages, and unemployment. Chapter 3, Fiscal Accounting and Analysis, covers the framework of fiscal accounts, based on the IMF’s Government Finance Statistics (GFS) and includes a discussion of different measures of the fiscal balance; of the macroeconomic effects of alternative methods of financing a fiscal imbalance; and of key concepts in fiscal analysis, such as the inflation tax, debt neutrality, and fiscal sustainability. It also covers the analysis of fiscal revenues and includes guidelines for assessing a tax system and for analyzing public expenditures. Chapter 4, Balance of Payments Accounts and Analysis, introduces the conceptual framework of the balance of payments based on the Balance of Payments Manual, Fifth Edition, and presents some analytical tools used in the interpretation of developments in the external position, external debt, and international reserves. Chapter 5, Monetary Accounts and Analysis, begins by presenting the structure of the financial and monetary systems and the main accounting principles that underlie monetary statistics including the monetary survey. The chapter also touches on the role of the central bank and special issues such as capital flows, exchange rate regimes, currency substitution, and financial deregulation. Chapter 6, The Flow of Funds: Macroeconomic Interrelations, presents the framework of the flow of funds accounts and a brief exposition of how these accounts can be useful in macroeconomic analysis.
Each chapter is followed by brief background information on the case study of Poland and a set of exercises and issues for discussion that can be used in a workshop as a review and as a basis for group discussion of the material covered.
All the statistical and background information on Poland used in this volume is based on information published by the IMF, the World Bank, and the Polish Central Statistical Office. These sources include Poland—Background Paper, IMF Staff Country Report No. 96/19 (Washington: International Monetary Fund, 1996); Poland—Statistical Tables, IMF Country Report No. 96/20 (Washington: International Monetary Fund, 1996); Liam P. Ebrill, Poland: The Path to a Market Economy, Occasional Paper No. 113 (Washington: International Monetary Fund, 1994); Poland: Policies for Growth and Equity, World Bank Country Study (Washington: World Bank, 1994); and Quarterly Statistics of the Polish Central Statistical Office (Warsaw, various issues).
The volume was prepared in the European Division of the IMF Institute, under the leadership and direction of Abdessatar Ouanes, Division Chief, and Subhash Thakur, Deputy Division Chief. Contributions were made by members of the European Division, including Ian Lienert, Philippe Marciniak, and Karen Swiderski. The views expressed are those of the authors and do not necessarily reflect the views of the IMF. The volume benefited greatly from the guidance and comments of Chorng-Huey Wong, Assistant Director of the IMF Institute, and from the advice of Patrick de Fontenay, former Director of the IMF Institute and Anthony Lanyi, former Deputy Director. The staff of the IMF Institute at headquarters and at the Joint Vienna Institute offered many helpful comments and suggestions. The untiring efforts of Deanna Kaufmann, Maryse Dube, and Brian Manuel in producing and organizing the documents for publication, and the valuable editorial assistance of Martha Bonilla of the External Relations Department and Emily Chalmers deserve special acknowledgement, as does the assistance of IMF’s European I Department, which provided the statistics and other background information on Poland.