Scribd Logo
Upload

Welcome to Scribd!

  • 20 views

    Impact Globalization Growth CSO-Ireland

    Uploaded by

    Aditi
    Globalization has a significant impact on measuring economic growth due to the fragmentation of production across borders. It impacts economic data in areas like changes in ownership of goods and capital assets, and the location of intellectual property assets. Countries are working to better account for these impacts through innovations like distinguishing domestic and foreign indicators, and using measures beyond just GDP to provide more insight into underlying economic activity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Impact Globalization Growth CSO-Ireland

    Uploaded by

    Aditi
    20 views32 pages
    Globalization has a significant impact on measuring economic growth due to the fragmentation of production across borders. It impacts economic data in areas like changes in ownership of goods and capital assets, and the location of intellectual property assets. Countries are working to better account for these impacts through innovations like distinguishing domestic and foreign indicators, and using measures beyond just GDP to provide more insight into underlying economic activity.

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Globalization has a significant impact on measuring economic growth due to the fragmentation of production across borders. It impacts economic data in areas like changes in ownership of goods and capital assets, and the location of intellectual property assets. Countries are working to better account for these impacts through innovations like distinguishing domestic and foreign indicators, and using measures beyond just GDP to provide more insight into underlying economic activity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    20 views32 pages

    Impact Globalization Growth CSO-Ireland

    Uploaded by

    Aditi
    Globalization has a significant impact on measuring economic growth due to the fragmentation of production across borders. It impacts economic data in areas like changes in ownership of goods and capital assets, and the location of intellectual property assets. Countries are working to better account for these impacts through innovations like distinguishing domestic and foreign indicators, and using measures beyond just GDP to provide more insight into underlying economic activity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 32

    Impact of Globalization on measuring

    economic growth
    CIRET Workshop
    Poznan 14 September 2021

    Michael Connolly
    Impact of Globalization on measuring economic growth -
    Presentation outline
    • Why does it have such an impact?
    • Where does it have an impact on economic data?
    • What can be done?
    Why does Globalisation
    have such an impact?
    Globalisation and Fragmentation of Production

    Recording changes in economic ownership of goods and capital


    assets in particular
    Both intangible and tangible capital assets
    Fundamental question - Who owns what?
    Basis for economic statistical compilation
    Why does fragmentation occur ?
    Features of Globalised Production
    • Contract Manufacturing - Factoryless production
    • Importance of Intangible assets – Intellectual Property in
    production
    • Location of intellectual property and changes in location
    Changes in Accounting Standards and Regulatory
    Oversight
    • R&D assets only recognised as capital formation in SNA 2008
    • Coincided with OECD led developments in transfer pricing -
    BEPS etc.
    • Reduce the incidence of moving profits across jurisdictions to
    minimise taxes
    • Alignment of local legislation with BEPS recommendations
    BEPS Recommendations
    • Companies encouraged to locate an IP asset where the value
    added arising from it is occurring
    • Against holding these assets in SPE type structures in tax
    friendly jurisdictions
    How/Where does it
    impact the data
    Case Study - Ireland 2015
    • Context - concentration of large MNEs in a small island
    economy
    80%
    60%
    40%
    20%
    0%
    MIP Trade Trade BOP Service BOP Service
    Turnover Export Import Exports Imports
    Corporate restructuring -
    • Relocation of entities from abroad
    • Large IP assets on the Balance Sheet
    • IP assets used in contract manufacturing abroad
    • Enormous addition to GVA /GDP for Ireland
    Impact of Increases in Stock of Capital Assets

    Increased
    Increased Production Increase
    Increased Increased
    Capital of Goods d
    Depreciation Profits
    Assets and Exports
    Services
    Balance Sheet Impact –
    Capital
    1,200

    1,000

    800
    €billion

    600

    400

    200

    0
    2011 2012 2013 2014 2015
    Balance Sheet Impact – Intl Accounts
    Revisions to Ireland’s Net International
    0 Investment Position
    €million
    -100,000

    -200,000

    -300,000

    -400,000

    -500,000

    -600,000
    00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
    20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
    Net IIP, March 2016
    120000 Part of a more general trend not an iso-
    100000
    lated incident….R&D Imports – IPP

    80000

    60000

    40000

    20000

    0
    2013 2014 2015 2016 2017 2018 2019 2020
    Trend in Net Exports 2010 = 100
    v's Total Exports and Imports

    250
    2010 = 100 350,000

    €billion
    200 280,000

    150 210,000

    100 140,000

    50 70,000

    0 0
    2010 2011 2012 2013 2014 2015
    Exports Imports Net Exp
    NIE 2020
    Annual GDP and GNP (constant prices)

    Year-on-Year
    Growth Rates

    GDP +5.9% (+3.4%)


    GNP +3.4% (+0.6%)
    Previous preliminary annual
    estimates in brackets
    Trend in Irish and EU Household Savings Ratio
    €billions
    120 16.0%

    14.0%
    100 IE
    EU 12.0%
    80
    10.0%

    60 8.0%

    6.0%
    40
    4.0%
    20
    2.0%

    - 0.0%
    GDI200 200 200 201
    200 200 PCE
    201 201 201 201 201
    5 6 7 8 9 0 1 2 3 4 5
    Saving Ratio EU Saving Ratio
    Reporting economic data in
    globalised economies -
    innovations
    Changes to presentation of Economic data
    • Level indicator of economy – excl. globalisation GNI*
    • Structural indicator - Domestic and Foreign
    • Cyclical indicator - developments in underlying economy
    • Use SNA framework - more emphasis on Net measures
    • Not just GDP, Institutional Sector Accounts, Productivity
    Accounts , Extended SUTs etc.
    GDP, GNP, Modified GNI and NNI at constant prices
    As we go from GDP
    to NNI impact of
    the corporate relocations and IPP is
    reducing
    Modified GNI (GNI*) - 2020

    Adjustments
    EU Taxes Depreciation
    Net Factor
    GDP GNP
    + and GNI GNI*
    IPP&Aircraft
    €372.9bn + Flows
    -€90.2bn = €282.6bn Subsidies
    +€1.1bn
    = €283.7bn + Corp
    Inversions
    = €208.2bn

    -€75.6bn
    General Government Debt to GDP/GNI* Ratios
    General Government Balance as a percentage of GDP and GNI*
    Rest of
    Institutional Sectors Ireland
    S1
    World
    S2

    Government Households
    Corporations and non-
    S.13 profits S.1M

    Non-Financial Financial
    Corporations Corporations Households Non-profits
    S.12 S.14 S.15
    S.11

    Foreign Domestic Redomiciled Foreign Domestic


    MNE S.11a S.11b PLC S.11c MNE S.12a S.12b
    Oth Fgn
    53.593530 Dom
    GVA 6762675
    124.54016
    2017 19% 1209508
    S.1 45%

    LCU
    100.56155
    7784985
    36%

    CoE 2017 GOS 2017


    Oth Fgn Oth Fgn;
    17.93613461571 35.657396060549 Dom, €56 bn,
    85 20% ; 19% 30%
    LCU Dom
    65.73985355086 LCU;
    4.476858884738 96.0846989002
    52 5% 12 75%
    462; 51%
    GVA Domestic and Foreign €m
    0 50,000 100,000 150,000
    Agriculture, forestry and fishing (A)

    Construction (F)
    DOM
    Transportation and storage (H)
    FGN

    Information and communication (J)

    Other services (L, N, R, S)

    Public administration and defence; compulsory social security (O)


    In conclusion

    • Globalisation driven by fragmentation

    • Mobile intangible assets - Intellectual Property Products large impacts on economic


    accounts

    • For increasingly complex economies - a single indicator can no longer tell the full story

    • Work needed to provide insight on the domestic story – including work in domain of
    business statistics – Structural, Level and Cyclical indicators required.

    • International Statistical Standards being updated to provide more insight


    Questions ?

    [email protected]

    You might also like