Global economic accounting and its critics: Objective approaches (1)

Abstract

The article describes and evaluates the internationally harmonized System of National Accounting which primarily refers to flow-related, monetarily assessed variables measured within a specified time period (typically one year or a year’s quarter). It becomes obvious that the calculated aggregated incomes are valuable for comparing regions with each other or for comparing different regions over time regarding their material living standards. However, the results of those accounting systems (e.g. the calculation of aggregate incomes like the Gross Domestic Product or the Gross National Income) have a number of deficiencies so that they should be considered with caution as measures of wellbeing. Moreover, the performance of the System of National Accounting faces some challenges generated by the economic process of globalization, especially mediated via the transmission channel of “multinational enterprises”.