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The Measurement of a Nation's Terms of Trade Effect and Real National Disposable Income Within a National Accounting Framework
Author(s) -
Silver Mick,
Mahdavy Khashayar
Publication year - 1989
Publication title -
journal of the royal statistical society: series a (statistics in society)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.103
H-Index - 84
eISSN - 1467-985X
pISSN - 0964-1998
DOI - 10.2307/2982822
Subject(s) - national accounts , measures of national income and output , accounting , economics , national income and product accounts , econometrics , business , macroeconomics
SUMMARY Changes in a nation's real income may differ from changes in domestic production due to gains (losses) arising from changes in the prices of exports relative to imports (terms of trade effect) and changes in net factor income and current transfers from abroad. Measures of these components in real terms are contingent on a particular utilization of the income arising (foregone) from these sources. This paper proposes a national accounting framework for the measurement of real income, surveys and proposes alternative deflators and provides empirical evidence of how misleading a measure contingent on one spending scenario is. An interpretative framework based on more than one measure is proposed.