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VALUE AND INCOME IN THE NATIONAL ACCOUNTS AND ECONOMIC THEORY
Author(s) -
Bos Frits
Publication year - 1997
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1997.tb00213.x
Subject(s) - economics , national accounts , national income and product accounts , measures of national income and output , valuation (finance) , net national income , gross fixed capital formation , comprehensive income , public economics , welfare , passive income , national wealth , microeconomics , macroeconomics , gross income , accounting , market economy , foreign direct investment , tax reform , state income tax
National accounting concepts of value and income differ from their economic theoretic counterparts in two respects. Firstly, they are more precise in order to give concrete guidelines for measurement, e.g. with respect to the concept of capital formation and the treatment of taxes. Secondly, they are fundamentally different. Valuation in the national accounts is not forward‐looking and not based on a notion of perfect competition. Similarly, concepts of income in the national accounts are not measures of net return to wealth or welfare and they do not intend to show income as a reward for some specific factors of production. The national accounts concepts of value and income are descriptive concepts that can only be well understood in view of the specific accounting framework to which they belong.