Simultaneous Reconciliation of Large Disaggregated Time Series of Accounts After a Benchmark Revision with an Application to the U.S. Input-Output Accounts

• Activity Number: 169
• Type: Topic Contributed
• Date/Time: Monday, August 10, 2015 : 10:30 AM to 12:20 PM
• Sponsor: Business and Economic Statistics Section
• Author(s): Baoline Chen* and Tommaso Di Fonzo and Thomas Howells and Marco Marini
• Companies: Bureau of Economic Analysis and University of Padova and Bureau of Economic Analysis and IMF
• Keywords: Benchmarking ; Reconciliation ; Temporal and Contemporaneous Constraints ; Input-output Accounts

Abstract

In this study the 2003-2007 U.S. annual input-output (IO) accounts, GDP-by-industry accounts and expenditure-based GDP are reconciled with the 2002 and 2007 quinquennial benchmarks and all contemporaneous constraints of the IO accounts for the in-between years. The series are adjusted at the disaggregated production level of details according to statistical procedures able to deal with large systems of accounts subject to both temporal and contemporaneous constraints. Our aim is to adjust the preliminary levels of the series using a simultaneous least-squares procedure based on the proportional first difference criterion, a movement preservation principle proposed by Denton (1971), such that they (i) are consistent with the quinquennial benchmarks available, (ii) fulfill all the accounting relationships for any given year, and (iii) show movements that are as close as possible to the preliminary information. We evaluate the proposed procedure i) with a pure proportional procedure; and ii) with a RAS procedure that was used in the final balancing of the accounts in production, allowing some variables to be predetermined.