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SNA Indicators and the Terms of Trade

SNA Indicators and the Terms of Trade. Michael Davies, First Assistant Statistician, Macroeconomics and Integration Group, Australian Bureau of Statistics. Australia’s mining boom. Since 2003, the Australian Economy has experienced a mining boom High demand for Australian exports

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SNA Indicators and the Terms of Trade

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  1. SNA Indicators and the Terms of Trade Michael Davies, First Assistant Statistician, Macroeconomics and Integration Group, Australian Bureau of Statistics

  2. Australia’s mining boom • Since 2003, the Australian Economy has experienced a mining boom • High demand for Australian exports • Driven more by growing export prices than by an increase in export volumes

  3. Measuring the Effects of Trade • Gross Domestic Product (GDP) • Real Gross Domestic Income (RGDI) • Real Gross National Income (GNI) • Real Net National Disposable Income (RNNDI)

  4. Real Gross Domestic Income • Measures purchasing power of total income generated by domestic production • ABS deflates RGDI’s trading gains measure by using the import price deflator • real value of exports, in ABS’s view, is best measured by the value of imports that can be purchased from exporting

  5. GDP and GDI

  6. Real Gross National Income • RGNI = RGDI • Plus net real primary income payable to rest of world • Note: already adjusted for terms of trade

  7. Real Net National Disposable Income • Expands on RGNI to account for: • depreciation of fixed capital • amounts of net property incomes payable to the rest of world • A measure for total final consumption and saving possibilities of an economy

  8. Real Net National Disposable Income 8

  9. Gross Fixed Capital formation and Net Payable to Rest of the World

  10. Summary Statistics

  11. Conclusion • 2008 SNA is a comprehensive framework • presents a variety of summary indicators • no single indicator sufficient • large terms of trade changes requires consideration of RGDI, RGNI and RNNDI • RNNDI appropriate for representing consumption possibilities.

  12. Questions 12

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