LECCIÓN 1

LA MEDICIÓN DE LA
ACTIVIDAD ECONÓMICA

1
¿Qué competencias vamos a
adquirir en esta lección?

 Aprender conceptos básicos: definición de

macromagnitudes.
 Manejar con soltura y precisión la
terminología y los conceptos que el profesor
explique en clase.
 Saber buscar información económica y, a
partir de esa información, calcular las
variables que se explican en las exposiciones
teóricas.

2
 ¿Cómo vamos a organizar la lección?

 Exposición teórica:
 1.1.- La actividad económica.
 1.2.- Representación de la actividad económica a
través del flujo circular de la renta.
 1.3.- Las variables macroeconómicas.
 1.4.- La Balanza de Pagos.

 Ejercicios prácticos:
 Cálculo del PIB, PNB, RN, RNB, RNBD, S, Cap. o
Nec. Financiación de la economía.
 Construcción de una Balanza de Pagos.

3
 ¿Qué bibliografía es imprescindible
para preparar la lección?
BiBLIOGRAFÍA BÁSICA
 ALONSO, J. A.; ÁLVAREZ, I. (2019): “Medición de la actividad económica”, Alonso, J. A. (Dir.),
Lecciones sobre economía mundial. Introducción al desarrollo de las relaciones económicas
internacionales, Thomson-Civitas, Madrid (chapter 1).
 ALONSO, J. A.; MAESO, F. (2019): “Balanza de pagos, equilibrio externo y tipo de cambio”, Alonso, J. A.
(Dir.), Lecciones sobre economía mundial. Introducción al desarrollo de las relaciones económicas
internacionales, Thomson-Civitas, Madrid (chapter 7).
 MUÑOZ CIDAD, C.; RAPÚN, M. y IRÁIZOZ, B. (2008): Las cuentas de la nación: introducción a la
Economía Aplicada, Civitas, Madrid (chap. 1,2, 3 4, 6 y 11).
 MUÑOZ CIDAD, C.; IRÁIZOZ, B. y RAPÚN, M. (2007): Las cuentas de la Nación II. Ejercicios, Civitas,
Madrid.
 DELGADO, M. J.; DE DIEGO, D.; DÍAZ, C.; MARTÍN, M. (2002): Introducción a la economía aplicada:
metodología, fuentes estadísticas y casos prácticos, Ariel, Barcelona (chapters 1 & 7).
BIBLIOGRAFÍA SUPLEMENTARIA
 INTERNATIONAL MONETARY FUND (2009, updated Nov. 2013): Balance of payments and international
investment position manual, Sixth Edition , Washington, D.C.:
https://0-www-imf-org.library.svsu.edu/external/pubs/ft/bop/2007/bopman6.htm
 STIGLIZT, J.E.; SEN, A.; FITOUSSI, J.P. (2010): Mismeasuring our Lives: Why GDP Doesn't Add Up,
New Press, New York. Access to a PDF version:
http://www.nowforourturn.org/Reframing/StiglitzSustainabilityE.pdf
 UNITED STATES DEPARTMENT OF COMMERCE (2014): Concepts and Methods of the United States
National Income and Product Accounts, Bureau of Economic Analysis, July 2014.
http://www.bea.gov/national/pdf/NIPA_2015AnnualRevision.pdf 4
 ¿Qué web deberíamos visitar?

 http://pwt.econ.upenn.edu (???)
https://www.rug.nl/ggdc/productivity/pwt/ (OK)
 http:// www.worldbank.org/data/

 http:// www.undp.org

 http://epp.eurostat.ec.europa.eu/portal/page/portal/
eurostat/home/
 http://europa.eu

 http://www.ecb.int

 http://www.bde.es

 http://www.imf.org/external/index.htm
5
LECCIÓN 1

1.1. LA ACTIVIDAD ECONÓMICA

6
 La actividad económica

 Sistemas de Contabilidad Nacional: sistema ordenado y

fiable de información para el seguimiento de la actividad
económica. El SCN-93 de Naciones Unidas y el SEC-95
de la Unión Europea.

 En lenguaje más moderno, la actividad económica es: la

combinación de factores productivos para obtener
bienes y servicios que satisfagan las necesidades
humanas y aumenten el bienestar de la población.

 Se realiza, generalmente, en el seno de las empresas,

que son instituciones especializadas en llevar a cabo los
procesos productivos. Combinación de inputs para
obtener output. 7
 La actividad económica

 Medición de la actividad económica:

 Esquema simplificado que representa el conjunto de
transacciones que se realizan en una economía. Cuestión
nada simple:
 Dificultades técnicas y estadísticas.

 Para medir la actividad económica adoptamos un

criterio convencional y restrictivo:
 Se incluye lo que se puede medir con aceptable grado de
precisión, que no es todo lo que se produce.

 Ventajas:
 Lo que se mide se mide con aceptable precisión.
 Permite comparaciones internacionales.
8
 La actividad económica

 En definitiva se incluye lo que queda dentro de la Frontera

de producción, la actividad que pasa por el mercado.
Excepciones:
 Tareas dentro de los hogares para su propio consumo.
 Donaciones entre particulares.

 Criterio de valoración: precios de mercado (excepciones:

vivienda, imputación, autoconsumo de los agricultores o
pagos en especie a trabajadores). [Ver página 10 sobre
criterios de valoración].

 Hay que tener en cuenta: mercado de bienes y factores, los

sectores institucionales [ver páginas 12 y 13] y la actividad
financiera.
9
 La actividad económica (criterios de valoración)

 Precios básicos: precios al salir de las unidades

productoras. Incluyen los costes (en sentido estricto) y
determinados impuestos netos sobre la producción
(Tn/Pn): impuesto sobre actividades económicas.

 Precios de adquisición: son los que pagan los

compradores al adquirir los productos. Incorporan
todos los márgenes y todos los impuestos netos sobre
la producción e importaciones (Tn/P+M). También
reciben el nombre de precios de mercado.

 Las subvenciones corrientes son impuestos negativos.

Por impuestos netos se entiende el impuesto menos la
subvención correspondiente. 10
LECCIÓN 1

1.2. REPRESENTACIÓN DE LA
ACTIVIDAD ECONÓMICA A TRAVÉS
DEL FLUJO CIRCULAR DE LA RENTA
11
La actividad económica (sectores institucionales)

HOGARES AAPP
e ISFLSH

RESTO DEL
MUNDO

SOCIEDADES NO
INSTITUCIONES FINANCIERAS
FINANCIERAS

12
 El Flujo Circular de la Renta

Gasto en consumo MERCADO DE BIENES Y Exportaciones

SERVICIOS
Importaciones
Empresas vendiendo
Hogares comprando Ingresos de ventas
(facturación)
Demanda de
bienes y servicios Oferta de bienes y
servicios

HOGARES EMPRESAS
Venden y compran Transferencias Producen y venden
AAPP Impuestos RESTO
bienes y servicios bienes y servicios
Maximizan bienestar social DEL
Poseen y venden Contratan y usan factores
MUNDO
factores de producción de producción
Maximian utilidad Transferencias Maximizan beneficios
Impuestos

Transferencias

Oferta Factores Demanda Factores Venta Factores

MERCADO DE FACTORES
Hogares vendiendo
Empresas comprando
Renta de factores Pago de factores Renta de factores
(remuneración) 13
El flujo Circular de la Renta

En suma:
Hay dos (“virtuales”) mercados: factores and productos.

- Hogares vendes sus factorss (L y K) a las empresas, para que ellas

pueden producir.

- Las empresas recompensan-pagan a los hogares-familias por el uso

de estos factores (wages, interest, rents, profits).
También, las empresas vendes su producción final a los hogares, que
pagan con las rentas recibidas.

- Las Administraciones Públicas también alquilan factores de las

familias, con la correspondiente remuneración, y venden y compran
productos a familias y empresas. Igualmente, ingresan los impuestos
y abonan transferencias.

Gasto (Demanda) = Produccción (Oferta) = Renta 14

LECCIÓN 1

1.3. VARIABLES MACROECONÓMICAS

15
 Las variables macroeconómicas

 Son agregados económicos que reflejan operaciones que tiene lugar en

una economía.
 PIB: Corriente de bienes y servicios finales (diferencia con Producción)
que se generan en el interior de un país (diferencia con Nacional)
durante un periodo determinado y valorada en unidades monetarias.
 El PIB es una variable flujo que mide la capacidad productiva de un
país:
Producción (P) – Consumos intermedios (CI) = PIB
 PNB: Diferencia entre una magnitud interior (lo que se produce en el
territorio de un país) y nacional (lo que producen los factores
productivos del país, residentes, con independencia de donde lo
produzcan).
 PIB asigna la producción basándose en la propiedad. 16
 Macroeconomic Variables

Concepts:
 Cosumos intermedio (CI): consists of the value of the goods
and services consumed as inputs by a process of production,
excluding fixed assets whose consumption is recorded as
consumption of fixed capital; the goods or services may be either
transformed or used up by the production process.

 Producto Nacional Bruto (PNB): is the market value of all the

products and services produced in one year by labour and property
supplied by the residents of a country = RNB)

17
 Las variables macroeconómicas
(Comprender la diferencia entre Producción y Valor Añadido)

Agricultores Molineros Panaderos Tiendas Total

Producciónn
(Output) 50 75 105 115 = 345
Consumos
Intermedios - 50 75 105 = 230
Valor Añadido
(VA) o PIB 50 25 30 10 = 115

La Producción incluye los consumos intermedios, no indica la

aportación productiva del país. El Valor Añadido sí (VA para los
sectores, PIB para el conjunto de la economía). En el caso de la
producción estamos contabilizando dos veces determinados
productos.
18
 Las variables macroeconómicas

 PNB o RNB = PIB + Rentas Netas con el resto del Mundo

(del trabajo y del capital. Recibidas menos pagadas).
 RNBD = RNB + Transferencias Corrientes Netas con el Resto
del Mundo (recibidas menos pagadas)
 RNBD – C = S
 La capacidad o necesidad de financiación de la
economía:
S + Transferencias Netas de capital – FBK – Adquisición y
disposición de activos no producidos] = Capacidad o
Necesidad de financiación de la economía [= Saldo por
operaciones corrientes + Saldo Cta. de Capital].
 Debemos distinguir entre:
 magnitudes brutas y netas (- depreciación Consumo de Capital Fijo).
 variables en términos reales y nominales (a precios de cada año). 19
Macroeconomic Variables

Concepts:
- Transferencias con el Resto del Mundo: 1) Migration Remittances,
and 2) Official Unrequited Transfers from the European Union or other
international organizations.
- Formación Bruta de Capital is measured by the total value of the
gross fixed capital formation, changes in inventories and acquisitions less
disposals of valuables for a unit or sector.
- Formación bruta de capital fijo is measured by the total value of a
producer’s acquisitions, less disposals, of fixed assets during the
accounting period plus certain additions to the value of non-produced
assets (such as subsoil assets or major improvements in the quantity,
quality or productivity of land) realised by the productive activity of
institutional units.

20
 Las variables macroeconómicas

 El PIB: 3 métodos de estimación

 Método de la demanda (Gasto):
 PIB = CF + FBK + X - M

 Método de la oferta (VA):

 PIB = VABa + VABi + VABs + Tn/Po

 Método de la renta (Remuneración de los factores):

 PIB = RA + EBE + RM + Tn/P+M

Nota: explicación impuestos ver página 19

21
Macroeconomic Variables
Concepts:
 FCE: Final Consumption Expenditure; GCF: Gross Capital Formation;
 GVA: Gross Value Added
 Compensation of employees (COE) measures the total
remuneration to employees for work done. It includes wages and
salaries, as well as employer contributions to social security and other
such programs.
 Gross operating surplus (GOS) is the surplus due to owners of
incorporated businesses. Often called profits, although only a subset of
total costs are subtracted from gross output to calculate GOS.
 Gross mixed income (GMI) is the same measure as GOS, but for
unincorporated businesses. This often includes most small businesses.

 The sum of COE, GOS and GMI is called total factor income; it is the
income of all of the factors of production in a firm or company. It
measures the value of GDP at factor (basic) prices. 22
 Las variables macroeconómicas
(Los impuestos en el SEC-95)

 T/P+M (impuestos sobre la producción y la importación)

todo tipo de pagos a las AA.PP. para producir, consumir o importar
bienes y servicios, para utilizar mano de obra o por la propiedad y
uso de activos productivos.
Existen dos grandes categorías:
 T/Po (impuestos sobre los productos) son
Incluidos en los impuestos que gravan las unidades producidas o
precios de distribuidas (IVA, impuestos y cargas sobre las
adquisición importaciones, impuestos específicos y sobre
operaciones financieras).
 T/Pn (otros impuestos sobre la producción) los
Incluidos en impuestos que integran el VAB a precios básicos
precios básicos (gravan a las empresas aunque no tengan beneficios e
independientemente de las unidades producidas. Ej.
imp. sobre actividades económicas).
23
LECCIÓN 1

1.4. LA BALANZA DE PAGOS

24
 La Balanza de pagos

 La balanza de pagos:
Documento contable (método de partida doble, dos
columnas), que registra sistemáticamente (estructura)
las transacciones económicas realizadas entre los
residentes de un país (seis meses al año,
independientemente de la procedencia del capital o de
su pasaporte) y el resto del mundo (ámbito real,
financiero, sean operaciones mercantiles o sin
contrapartida) durante un periodo de tiempo (variables
flujo y no stock).

25
 La Balanza de pagos

 Para facilitar las comparaciones entre países, los

registros se realizan siguiendo las norma
internacionales establecidas en el Manual de Balanza de
Pagos (6ª edición) del FMI vigente desde 2009 (see BASIC
BIBLIOGRAPHY, p. 4) :
https://www.imf.org/external/pubs/ft/bop/2007/pdf/bpm6.pdf

 Aproximación al Sistema de Cuentas Nacionales (cuenta

“Resto del Mundo”).

 Estructura de la balanza de pagos......

26
 La Balanza de pagos

BALANZA DE PAGOS
Sub-Balanza o Sub-Balanza o
Cuenta Corriente Cuenta Financiera
Inversiones Directas
Balanza comercial
Inversiones en Cartera
Balanza de servicios
Derivados
Balanza de rentas primarias
Otras Inversiones
Balanza de rentas secundarias
Reservas y otros activos
Sub-Balanza o
Cuenta de capital Errores y omisiones 27
 La Balanza de pagos

 La Sub-Balanza o Cuenta Corriente agrupa todas las

operaciones que afectan a la renta disponible. Ingresos y
pagos.
 Estas operaciones se agrupan en cuatro sub-balanzas:
 Bienes, mercancías o comercial: X e M de mercancías.
 Servicios: turismo, transportes, seguros, servicios
prestados a empresas, comunicaciones, royalties y licencias
de uso de activos inmateriales (patentes, marcas), se
incluyen también las actividades servicios ilegales
(estimación)….
 Rentas primarias: retribución de los factores (L y K) del
país que operan en el exterior y viceversa.
 Rentas secundarias: remesas de emigrantes y ayuda
internacional (p. e. PAC, FSE).
28
 La Balanza de pagos

 La Sub-Balanza o Cuenta de Capital incluye:

 Las transferencias netas de capital (ayudas para
financiar la formación de activos (FEDER,…).
 Ingresos netos obtenidos por la compraventa de
activos no producidos (tierra, subsuelo…).

 La suma de los saldos de esta balanza y de la

corriente nos da la capacidad (si es positivo) o
necesidad (si es negativo) de financiación de la
economía. Si la economía tiene capacidad de
financiación, sale capital para financiar a otras
economías; si tiene necesidad, debe recibir capital del
exterior.
29
 Some concepts:

 CAP: Common Agricultural Policy

 ESF: European Social Fund
 ERDF: European Regional Development Fund
 Trading in this regard means buy-sell
 In finance, a Derivative is a contract that derives its value from the performance of another
underlying value or indicator, for instance, an asset, index, or interest rate, and is often simply
called the “underlying”. Some of the more common derivatives include
forwards, futures, options, swaps.
 In TOURISM: included imputed rents to property owners in a country other than the one of
their residences when they realize temporary stays in the same. The annotation is done on the
one hand in 'other services' or in ‘Tourism and Travels’ (inflows), and on the other in 'capital
income' (outflows). No annotation in Reserves Assets.
 In SECONDARY INCOME are included (as remittances) lottery prizes obtained in the country
and send abroad.
 The sum of the balances on the current and capital accounts represents the net
lending (surplus) or net borrowing (deficit) by the economy with the rest of the
world. This is conceptually equal to the net balance of the financial account. In other
words, the financial account measures how the net lending to/ or borrowing from/ nonresidents
is financed (see next page). /30
 La Balanza de pagos

 La Sub-Balanza o Cuenta Financiera:

 Se recogen las variaciones netas de los activos y pasivos
de España con el exterior, según los instrumentos que se
han utilizado para otorgar u obtener financiación
(transacciones financieras o de activos –dinero, créditos,
títulos representativos de propiedad o de deuda, divisas).

 El saldo de esta sub-balanza menos los errores y

omisiones es igual al saldo de la cuenta corriente más la
de capital, o lo que es lo mismo, a la capacidad o
necesidad de financiación.
B.CC + B.K = B.F - EO
31
 La Balanza de pagos
 La Sub-Balanza o Cuenta Financiera:
 En esta sub-balanza se recogen dos partidas: Banco de España y
Excluido el Banco de España. Esta diferenciación se hace desde que
España se incorporara al euro.
 En este último apartado se recogen las entradas y salidas netas de
capital según modalidades:
 Inversión Directa (pretensión duradera: 10% de control -FMI-), se

incluyen ganancias reinvertidas y flujos entre matriz y filial

(préstamos, adquisición bonos…).
 Inversión en Cartera. Inversiones en valores negociables de otro

país (excepto Directa) para obtener rentabilidad financiera.

(acciones, bonos etc., sin pretensión de control).
 Otras inversiones (préstamos, depósitos….), derivados financieros,

 (Variación de) Activos reserva (p.e. la posición de reserva en el FMI,

32
etc.).
 Balance of Payments

 [Variation or Change of] Reserve Assets: financial capital held by

monetary authorities (Central Banks) to finance trade imbalances [and check
the impact of foreign exchange fluctuations]… are those liquid assets of
international recognition, such as monetary gold, Special Drawing Rights
(SDR), the reserve position in the IMF, and cash and deposits in convertible
currencies of other countries.

 IN THIS CASE [Reserve assets], THE ANNOTATION (record) IS EXCLUSIVELY

IN THE COLUMN OF NET CHANCE ASSETS (NCA), WITH A POSITIVE SIGN
WHEN THE RESERVES ARE INCREASED AND WITH A NEGATIVE SIGN IN THE
CASE OF CONTRARY.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’
official reserves. The SDR was created as a supplementary international reserve asset in the context of the
Bretton Woods fixed exchange rate system. The collapse of Bretton Woods system in 1973 and the shift of
major currencies to floating exchange rate regimes lessened the reliance on the SDR as a global reserve asset.
Basket currencies: US dollar, euro, Japanese yen, British pound sterling and renminbi (from 2016: China RMB),
33
 Balanzas por cuenta corriente (en porcentaje del PIB),
12 1980-2017
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
1980 1985 1990 1995 2000 2005 2010 2015

Euro area China India Japan Spain United States

Fuente: FMI 34
Source: IMF 35
 España: Saldos de la balanza de pagos,
1985-2016 (en porcentaje del PIB)
6

-2

-4

-6

-8

-10

-12
1985 1990 1995 2000 2005 2010 2016
Capacidad/Necesidad financiación Bienes
Servicios Rentas Primarias
Rentas Secundarias Capital

Fuente: Banco de España 29

 Capacidad o necesidad de financiación de los sectores
institutionales, 1981-2012 (% sobre el PIB nominal)
15.0

10.0

5.0

0.0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994

2006
2007
2008
2009
2010
2011
2012
2013
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
-5.0

-10.0

-15.0
Sociedades no financieras Instituciones financieras
AA.PP. Hogares e ISFL
Resto Mundo

Fuente: García-Tabuenca, Crecente, Pablo-Martí, datos Banco España, 2014 30

VERSIÓN EN INGLÉS

38
LESSON 1

MEASURING ECONOMIC
ACTIVITY

39
What skills are going to
acquire in this lesson?

 Learn basic concepts: definition of macro-

variables.

 Handle the terminology and concepts taught

in class with ease and accuracy.

 Know how to find economic information and

calculate the variables explained.

40
How are we going to organize the lesson?

 Theoretical explanation:
 1.1. - Economic activity.
 1.2. - Representation of economic activity by the
circular flow of income.
 1.3. - Macroeconomic variables.
 1.4. - Balance of Payments.

 Practical exercises:
 Calculation of Production (GDP, GNP), National
Income (GDI, GNI, GNDI), Saving (S), NL or NB of
the economy.
 Making a Balance of Payments.
41
 What literature is essential to
prepare the lesson?
BASIC BIBLIOGRAPHY
 ALONSO, J. A.; ÁLVAREZ, I. (2019): “Medición de la actividad económica”, Alonso, J. A. (Dir.), Lecciones sobre
economía mundial. Introducción al desarrollo de las relaciones económicas internacionales, Thomson-Civitas,
Madrid (chapter 1).
 ALONSO, J. A.; MAESO, F. (2019): “Balanza de pagos, equilibrio externo y tipo de cambio”, Alonso, J. A. (Dir.),
Lecciones sobre economía mundial. Introducción al desarrollo de las relaciones económicas internacionales,
Thomson-Civitas, Madrid (chapter 7).
 MUÑOZ CIDAD, C.; RAPÚN, M. y IRÁIZOZ, B. (2008): Las cuentas de la nación: introducción a la Economía
Aplicada, Civitas, Madrid (chap. 1,2, 3 4, 6 y 11).
 MUÑOZ CIDAD, C.; IRÁIZOZ, B. y RAPÚN, M. (2007): Las cuentas de la Nación II. Ejercicios, Civitas, Madrid.
 DELGADO, M. J.; DE DIEGO, D.; DÍAZ, C.; MARTÍN, M. (2002): Introducción a la economía aplicada:
metodología, fuentes estadísticas y casos prácticos, Ariel, Barcelona (chapters 1 & 7).

SUPPLEMENTARY BIBLIOGRAPHY
 INTERNATIONAL MONETARY FUND (2009, updated Nov. 2013): Balance of payments and international
investment position manual, Sixth Edition , Washington, D.C.:
https://0-www-imf-org.library.svsu.edu/external/pubs/ft/bop/2007/bopman6.htm
 STIGLIZT, J.E.; SEN, A.; FITOUSSI, J.P. (2010): Mismeasuring our Lives: Why GDP Doesn't Add Up, New Press,
New York. Access to a PDF version: http://www.nowforourturn.org/Reframing/StiglitzSustainabilityE.pdf
 UNITED STATES DEPARTMENT OF COMMERCE (2014): Concepts and Methods of the United States National
Income and Product Accounts, Bureau of Economic Analysis, July 2014.
42
http://www.bea.gov/national/pdf/NIPA_2015AnnualRevision.pdf
 What websites should we visit?

 http://pwt.econ.upenn.edu (???)
https://www.rug.nl/ggdc/productivity/pwt/ (OK)
 http:// www.worldbank.org/data/

 http:// www.undp.org

 http://epp.eurostat.ec.europa.eu/portal/page/portal/

eurostat/home/
 http://europa.eu

 http://www.ecb.int

 http://www.bde.es

 http://www.imf.org/external/index.htm
43
LESSON 1

1.1. ECONOMIC ACTIVITY

44
 Economic activity

 National Accounting Systems: orderly and reliable

information for monitoring economic activity. The
UNSNA-93 and ESA-95 EU.

 In modern language, economic activity is the

combination of factors of production used to obtain
goods and services that satisfy human needs and
increase the welfare of the population.

 Is generally performed within companies/firms that are

specialized institutions that carry out production
processes. Combination of inputs to get outputs.

45
 Economic activity

 Measuring the activity:

 A simplified system is used to represent all transactions
carried out in an economy during a period of time. This is
not a simple question!
 Technical and statistical difficulties.

 To measure the activity, we adopt a conventional and

restrictive criterion:
 The activity includes what can be measured with an
acceptable degree of accuracy. This may not include all that
is produced.

 Advantages:
 What is measured is measured with acceptable accuracy.
 It allows international comparisons.
46
 Economic activity

 Includes what is inside the Production Boundary: the activity

that goes through the market. Exceptions:
 Tasks completed within households for their own consumption.
 Private donations.

 The goods or services are valued at market prices (exceptions

–allocation or imputation method-: housing, consumption on
the farm, or in-kind payments to workers) [see page 10 on
valuation criteria].

 We must take into account: goods and factor markets,

institutional sectors [see pages 12 & 13] and financial activity.

47
 Economic activity (valuation criteria)

 Basic prices: Prices upon leaving the production units.

Include basic costs and certain net taxes on production
(Tn/Pn): business tax.

 Acquisition prices: are paid by buyers to purchase

products. They include all margins and all taxes on
production and imports (Tn/P+M)). Also called market
prices.

 The current subsidies are negative taxes. Net tax means

the tax minus subsidies and grants.

48
LESSON 1

1.2. REPRESENTATION OF
ECONOMIC ACTIVITY BY THE
CIRCULAR FLOW OF INCOME
49
Economic activity (institutionals sectors)

General
Households
Government
and NPISHs

Rest of the
World
Non-Financial
Financial Corporations
Corporations

50
 The Circular Flow of Income

Consumption Expenditure GOODS AND SERVICES Exports

MARKET Imports
Firms selling
Households buying Sales Revenue (turnover)
Demand of Goods
and services Supply of Goods
and services

HOUSEHOLDS FIRMS
Buy and consume Transfer Produce and sell goods
payments GENERAL GOVERNMENT Taxes REST OF
goods and services and services
Maximize social welfare THE
Own and sell factors Hire and use factors of
WORLD
of production production
Maximize utility Transfer Maximize benefits
Taxes
payments

Transfer
payments

Supply Factor Demand Factor Consumes/Sales Factor

FACTORS MARKET
Households selling
Firms buying
Income Factor (factor rewards) Payment for factors Income Factor
51
The Circular Flow of Income

In sum:
There are two (virtual) markets: factors and products.

- Households sell their factors (L and K) to the firms, so that

they can produce.

- The companies reward to the families by the use of these

factors (wages, interest, rents, profits).
Also, the firms sell its final production to the households, which
pay with the incomes charged.

- General government also hire factors of families, with the

corresponding remuneration, and sell and buy products to
families and firms. Also collect taxes and pay transfers.

Production (Supply) = Spending (Demand) = Income (Rent)

52
LESSON 1

1.3. MACROECONOMIC VARIABLES

53
 Macroeconomic Variables

 They reflect economic aggregate operations taking place in an

economy.
 GDP: Final goods and services (unlike with Production: P) generated
within an economy (distinct from National) during a given period and
valued in monetary units.
 GDP is a flow variable that measures an economy's productive capacity:
Production (P) – Intermediate Consumption (IC) = GDP
 GNP: Difference between an inner magnitude (which is produced in the
territory of an economy) and national (which produce the factors of
production of the economy, residents, regardless of where they occur).
 GNP allocates production based on ownership.

54
 Macroeconomic Variables

Concepts:
 Intermediate consumption (IC): consists of the value of the
goods and services consumed as inputs by a process of production,
excluding fixed assets whose consumption is recorded as
consumption of fixed capital; the goods or services may be either
transformed or used up by the production process.

 Gross national product (GNP): is the market value of all the

products and services produced in one year by labour and property
supplied by the residents of a country

55
 Macroeconomic Variables
(Understanding the difference between Production and Added Value)

Farmers Flour mills Bakeries Stores Total

Production
(Gross Output) 50 75 105 115 = 345
Intermediate
Consumption - 50 75 105 = 230
Added Value
(AV) or GDP 50 25 30 10 = 115

Production includes Intermediate Consumption and not the

country's productive contribution. This is the Value Added -VA-
(Value Added for sectors; and GDP for the whole economy). In
the case of Production, certain products are counted twice.
56
 Macroeconomic Variables

 GNP or GNI= GDP + Net Income from Rest of the World

(labour and capital factors. Received minus paid).
 GNDI = GNI + Net Current Transfers from Rest of the
World (received minus paid)
 GNDI - C = S or: [GNDP – FCE = GNS]
 Net Lending or Net Borrowing of the economy:
S + Net Capital Transfers RW - Gross Capital Formation -
Acquisitions minus Disposals of non-produced Assets = Net
Lending or Borrowing of the economy [= Current Account
balance + Capital Account balance ].
 Must be distinguished:
 Between ‘Gross’ and ‘Net’ magnitudes (- Depreciation or Consumption of
Fixed Capital).
 Among variables in ‘Real’ and ‘Nominal’ terms (at prices of each year). 57
 Macroeconomic Variables

Concepts:
- Current Transfers (RW_Rest of the World): Migration Remittances, and
Official Unrequited Transfers from the European Union or other international
organizations.
- Capital Transfers (RW) are different from current transfers by the fact that
they involve the acquisition or disposal of an asset, or assets, by at least one of
the parties to the transaction.
- Gross capital formation is measured by the total value of the gross fixed
capital formation, changes in inventories and acquisitions minus disposals of
valuables for a unit or sector.
- Gross fixed capital formation is measured by the total value of a producer’s
acquisitions, minus disposals, of fixed assets during the accounting period plus
certain additions to the value of non- produced assets (such as subsoil assets or
major improvements in the quantity, quality or productivity of land) realised by
the productive activity of institutional units.

58
 Macroeconomic Variables

 GDP: three estimation methods

 Expenditure approach (or based on demand):

 GDP = FCE + GCF + (X-M)

 Production (output) approach (or based on supply (VA)):

 GDP = GVAa + GVAi + GVAs + Tn/Po

 Income approach (or based on Total Factor Income):

 GDP = COE + GOS + GMI + Tn/P+M

[See page 23 on taxes]

59
Macroeconomic Variables
Concepts:
 FCE: Final Consumption Expenditure; GCF: Gross Capital Formation;
 GVA: Gross Value Added
 Compensation of employees (COE) measures the total
remuneration to employees for work done. It includes wages and
salaries, as well as employer contributions to social security and other
such programs.
 Gross operating surplus (GOS) is the surplus due to owners of
incorporated businesses. Often called profits, although only a subset of
total costs are subtracted from gross output to calculate GOS.
 Gross mixed income (GMI) is the same measure as GOS, but for
unincorporated businesses. This often includes most small businesses.

 The sum of COE, GOS and GMI is called total factor income; it is the
income of all of the factors of production in a firm or company. It
measures the value of GDP at factor (basic) prices. 60
 Macroeconomic Variables
Taxes in ESA-95

 Tn / Pn + M (taxes on production and imports): any

payments to the Public Administration to produce, consume
or import goods and services, to use labour, or the
ownership and use of assets (example: capital gain tax).

There are two broad categories:

 T / Po (taxes on products): are taxes on units produced

Included in the or distributed (VAT, taxes and charges on imports, excise
purchase prices taxes, and on financial transactions).

 T / Pn (other taxes on production): taxes that make up

Included in the the GVA at basic prices (charge companies even without
basic prices
benefits and regardless of the units produced. E.g. business
tax).
61
LESSON 1

1.4. BALANCE OF PAYMENTS

62
 Balance of Payments

 The Balance of Payments:

Accounting document (double-entry method, two
columns), which systematically records (structure)
economic transactions between residents (six months a
year, regardless of the source of capital or passport) of
an economy and the rest of the world (real or financial
scope, commercial or other operations without
compensation) for a period of time (flow and no stock
variables).

63
 Balance of Payments

 To facilitate comparisons between countries, records are

made following the international standard established in
the Balance of Payments Manual (6th edition) IMF 2009
(see BASIC BIBLIOGRAPHY, p. 4):

https://www.imf.org/external/pubs/ft/bop/2007/pdf/bpm6.pdf

 Approach to the System of National Accounts (“Rest of

World” Account).

 Structure of the balance of payments: …/…

64
 Balance of Payments

BALANCE OF PAYMENTS
Current Account Financial Account

Direct Invesment
Goods Account
Portfolio investment
Services Account
Financial derivatives*
Primary Income Account
Other investment
Secondary Income Account Reserve assets

Capital Account Errors and omissions** 65

 Balance of Payments

 Current Account comprises all operations affecting

disposable income. Receipts and payments.

 These operations are grouped into four sub-balances:

 Goods, merchandise: X and M goods.
 Services: tourism, transport, insurance, business services,
communications, royalties and licenses of use of intangible
assets (patent, trademark, film rights…), illegal service
activities (estimation).
 Primary Income: remuneration of factors (L and K) in
the economy that operate abroad and viceversa.
 Secondary Income: remittances and international aid
(e.g. CAP, ESF).
66
 Balance of Payments

 Capital Account includes:

 Net capital transfers (grants to fund asset formation
(ERDF, ...).
 Net receipts from the trading of non-produced assets
(land, subsoil...).

 The sum of the current and capital balances gives

us the: Lending (if positive_surplus) or Borrowing (if
negative_deficit) by the economy with the RW. If the
economy is capable of funding, the capital goes to fund
other economies; if the economy needs capital, it should
receive capital from abroad.
67
 Some concepts:

 CAP: Common Agricultural Policy

 ESF: European Social Fund
 ERDF: European Regional Development Fund
 Trading in this regard means buy-sell
 In finance, a Derivative is a contract that derives its value from the performance of another
underlying value or indicator, for instance, an asset, index, or interest rate, and is often simply
called the “underlying”. Some of the more common derivatives include
forwards, futures, options, swaps.
 In TOURISM: included imputed rents to property owners in a country other than the one of
their residences when they realize temporary stays in the same. The annotation is done on the
one hand in 'other services' or in ‘Tourism and Travels’ (inflows), and on the other in 'capital
income' (outflows). No annotation in Reserves Assets.
 In SECONDARY INCOME are included (as remittances) lottery prizes obtained in the country
and send abroad.
 The sum of the balances on the current and capital accounts represents the net
lending (surplus) or net borrowing (deficit) by the economy with the rest of the
world. This is conceptually equal to the net balance of the financial account. In other
words, the financial account measures how the net lending to/ or borrowing from/ nonresidents
is financed (see next page). /68
 Balance of Payments

 Financial Account:
 Net changes (acquisition and disposal) in assets and
liabilities with the exterior (assets or financial transactions
-money, credits, property or securities representing debt,
currencies-).

 The balance of Financial Account minus Errors and

Omissions is equal to the Current Account balance plus
the Capital Account balance (Net Lending or Net
Borrowing by the economy with the RW).
Current A. + Capital A. = Financial A. – O&E
69
 Balance of Payments
 Financial Account:
 Includes two items: Bank of Spain (or Central Bank) and Excluding
Bank of Spain. This differentiation is made since Spain joined the euro.
 In the latter section, Net inflows (NCA) and outflows (NCL) are
reflected in the following ways:
 Direct Investment: 10% control –IMF-, also includes reinvested

earnings and flows between parent and subsidiary companies

(loans, bonds acquisition ...).
 Portfolio Investment: investments in securities of another

country (except Direct) for financial profitability (stocks, bonds

etc., with no intention of economic control).
 Other investment: (loans, temporary transfers, deposits,
financial derivatives).
 [chance or variation of] Reserve assets and others* (e.g. the
70
reserve position in the IMF).
 Balance of Payments

 [Variation or Change of] Reserve Assets: financial capital held by

monetary authorities (Central Banks) to finance trade imbalances [and check
the impact of foreign exchange fluctuations]… are those liquid assets of
international recognition, such as monetary gold, Special Drawing Rights
(SDR), the reserve position in the IMF, and cash and deposits in convertible
currencies of other countries.

 IN THIS CASE [Reserve assets], THE ANNOTATION (record) IS EXCLUSIVELY

IN THE COLUMN OF NET CHANCE ASSETS (NCA), WITH A POSITIVE SIGN
WHEN THE RESERVES ARE INCREASED AND WITH A NEGATIVE SIGN IN THE
CASE OF CONTRARY.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’
official reserves. The SDR was created as a supplementary international reserve asset in the context of the
Bretton Woods fixed exchange rate system. The collapse of Bretton Woods system in 1973 and the shift of
major currencies to floating exchange rate regimes lessened the reliance on the SDR as a global reserve asset.
Basket currencies: US dollar, euro, Japanese yen, British pound sterling and renminbi (from 2016: China RMB),
71
 Current account balance (percent of GDP), 1980-2017
12

10

-2

-4

-6

-8

-10

-12
1980 1985 1990 1995 2000 2005 2010 2015

Euro area China India Japan Spain United States

Source: Compiled using data from IMF 72

Source: IMF 73
 Spain: Balance of payments,
1985-2016 (percentage of GDP)
6

-2

-4

-6

-8

-10

-12
1985 1990 1995 2000 2005 2010 2016
Net Lending or Borrowing Goods
Services Primary Income
Secondary Income Capital

Source: Banco de España 36

Net lending or net borrowing of institutional sectors, 1981-2012
(percentaje of nominal GDP)

Source: García-Tabuenca, Crecente, Pablo-Martí, data from Banco de España, 2014

37