Abstract
The change of the basis of the National Accounts from the ESA 95 to the ESA 2010 was determined by the economic, social, and technological changes experienced over the last 20 years. The changes of the ESA 2010 with respect to the ESA 95 are not limited to conceptual changes. There are important differences regarding the scope, with new chapters on satellite accounts, the general government accounts, and the rest of the world accounts. Furthermore, the chapters on quarterly accounts and regional accounts were significantly amplified. From the point of view of the general government, the main changes relate to the rules of the definition of the general government consolidation perimeter, the recording of military equipment purchase, the recording of pension funds, and the recording of interest with swaps.
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The carry-over is a statistical effect resulting from admitting that the quarterly levels of GDP for a given year are equal at the level of the last quarter of the previous year (i.e. null quarterly chaining variation rates are assumed for the current year). This can be interpreted as being the advanced contribution of GDP from the previous year to the growth of the year itself, whenever the growth of the last quarter exceeds the average from the last four quarters, with a positive carry-over effect or statistical overhang. In the opposite case, where the carry-over is negative, there is a statistical underhang.
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“Differentiating between market and non-market, and so, for public sector entities, classifying them into the general government sector or the corporations sector, is decided by the following rule:
An activity shall be considered as a market activity when the corresponding goods and services are traded under the following conditions:
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sellers act to maximise their profits in the long term, and do so by selling goods and services freely on the market to whoever is prepared to pay the asking price;
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buyers act to maximise their utility given their limited resources, by buying according to which products best meet their needs at the offered price;
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effective markets exist where sellers and buyers have access to, and information on, the market. An effective market can operate even if these conditions are not met perfectly.” (Source: ESA 2010)
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However, the payments of the government to a unit can be considered as sales, in two cases: If the price paid by the government to that unit is similar to the one it pays to private suppliers. Thus, it is ensured that this price, which is accepted by the private suppliers, has economic rationality and is economically significant; in the absence of private agents for the production of goods/services, the State pays in function of the produced volume, and not in function of the coverage of costs and losses.
References
ESA (2010) European System of Accounts 2010. https://ec.europa.eu/eurostat/cache/metadata/Annexes/nasa_10_f_esms_an1.pdf
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Miranda Sarmento, J. (2018). What Changes in the ESA 2010?. In: Public Finance and National Accounts in the European Context . Financial and Monetary Policy Studies, vol 47. Springer, Cham. https://doi.org/10.1007/978-3-030-05174-7_6
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DOI: https://doi.org/10.1007/978-3-030-05174-7_6
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