Institutional units

Institutional units:

Is an economic entity that is capable of owning assets in its own right, and incurring liabilities.

Can engage in economic activies and transactions with other entities

Can exchange ownership of goods or assets

Is responsible for its actions by law

Can enter into contracts

Provides financial statement information


A institutional unit residence is determined by the economic territory with which it has the strongest connection.

Total economy is defined as an entire set of resident institutional units. Nonresidential units are relevant to the extent that they interact with resident units(imports,exports and so on)

Legal or social entities are those that are recognized by law or society independent of the persons or entities that may own or control them.

Corporations are entities that are caoable of generating a profit for their owners. Main purpose to engage in the market production.

Government are entities that are responsible for the provision of goods and services to their constituents which is financed by taxation or other income. Also redistribute income and wealth by means of transfer.

Nonprofit institutions are created to produce goods and services. They are not allowed for financial gains.

Households is any groupd of persons who share a living accomodation.

We have individual(famileis for ex), and institutional(like prisons, retirmenet and so on).


Legally established corporations : refer to all entities that are capable of generating profits or other financial gains for their owners, are recornigez by law as separate legal entities from their owners, enjoy limited liability and are set up for purposes of engagng in market production.

Quasi corporations: is owned by a resident institutional unit, that operates as if it were a separate corporation and has suficient information to compile a complete set of accounts.Is de facto relationship to its owner is that of a corporation to a shareholder.

There are 3 types : unincorporated enterprise owned by government, owned by households, and owned by non resisdent insitutional units reffered as branches.

Notional resident units: immovable assets like land or natural resources, buildings are treated as being owned by residents, but if the legal owner is a nonresident, an artificial unit called NRU, is created in the SNA. This doesnt apply to consulates, embassies , military bases, which are subject to home territories lawys, and not of territories they are in.

Institutional units as producers

Productions of goods and services corporations, governemt household

Consumtion governemt household

Accumulation corporations governemt household

Institutional units viewed from the perspective of producers of goods and services are called enterprises.It can be a corporation, nonprofit, or an unincorporated enterprise.

To analyse productioctsfrom IU -> ESTABLISHMENTS.

An establishment is part of an enteprise or an enterprise, in a single location, where only a single productive activity is carried out. A group of establishments engaged in the same or similar kind of activity is an industry.

Residence in detail

For household, you need 1 year + to become a resident of that respective country.

For enterprises , it doesnt matter where is the origin, if you have branches inside of a country, it became a resident to that country.

Residence of households

Is still the same for students, patients,crews, diplomats/military,internation organization staff, cross border workers. For refugees it changes after 1 year

Residence of enterprises

Is key for transactions between resident and nonresident

Market and notmarket producers

Market for example a car producer

Nonmarket for example school that is free

Economically significat price: more than 50% of cost over a multiyear period

Then we have institutional household : churces, prisons, long term patiences and so on

Government sectors:

Main fucntions of government are to :

Assume responibility for the provision of goods and servides to the community.

Redistribute income and wealth by means of transfers

Engage primartly in nonmarket production

Finance their activities primarily out of taxation or other compulsory transfers

Fullfil their political responsibilities and their role as economic regulator.

We have general government units, all non market nonprofit institutions lke schools,museums and hospitals, and social securty funds imposed and controlled by those units

Central governemnt > state government > local governent

Social security funds Social security funds Social security funds

Budgetary and extra budgetary

The nonprofit institutions NPISH SECTOR

We have 3 types

Associations of persons to provide goods and services

Charities, reflie, or aid agencies for philanthropic purposes(doctors without borders eg)

Collective services

If any of these units are controlled by the government, they are not part of NPISH sector

Fundamentals of financial corporations

Raising funds and thereby incurring liabilities, and then lending funds on their account and risk.

The are two sectors : depository corporations and other financial corporations

The depository also includes the country central bank as well as other depository corporations

Other financial corporations are not ncluded in broad money.

8 indicators of control to determine if a corporation is controlled by the government :

Ownership of the majority of the voting interest, like shares

Control of the board or other governing body

Control of the appointment and removel of key personlle

Control of key committees of the entity

Government owning golden shares and options in the corporation that could give effective veto power

Regulation of the corporation that is so tight that is effectively implieis control

Control by a dominant public sector customer of group of public sector customers

Control attached to borrowing from the government.

Economic flows and stock positions

Economic flows can be described as the monetary expressions of economic actions and effects of events that result n changed in economical values within a period.. Creation, transformation, exchanged, transfer or extinction of economic value.

Stock postins measure economic value at a given point in time. We can therefore define a stock position as an institutional unit holdings of assests and liabilities at a specific time.

A transaction is an economic flow that is either an interaction between institutional units by mutual agreement or through the operation of law; or an action within an institutional unit that is analytically useful to treat as a transaction ofthen because the unit is operatin in two different capacities.

An other economic flow is a change in the volume or value of assest and liabilities that do not result from a transaction

Accounting rules of macroeconomic statistics


Bookkeeping in macroeconomic accounting system

Vertical double entry all credit and debit entries are equal

Horizontal double reflect the mutual economic relationship and ensures consistency

Quadruple-entry the result of both

When to record?

Economic ownerships changes.

Services are provided.

The time the related claims arise.

Transactions in inventorios.

In financials assets and liabilities.

Repayment of debt.

Other changes in the volume of assests and laibililities.

Holding gains and losses/reevaluations

Derived measures are the sum or balance of two or more flows or stock positions

Agregates are summations of individuals entries and elements n a class of lows or stock positions

Gross recordings and net recordings

Financial instruments are contracts made between instutional units.

Financial assets are financial claims that have demonstrable value, and are listen in balance sheet of instutional units. They deflect the relationship creditor-debtor(loans and deposits eg)

Off balance sheet items, they have non financial value unless specific future events occur and should be exclude from balance sheets.(financial guarantees and undrawn credit lines)(contigent financial claims)

Elements by SNA for financial assets :

Debt instrumnets or fixed income

Monetary gold and special drawing rights ( SDRs)

Currency and deposits

Debts securities


Insurances,pension and standardized guarantee schemes

Other accounts receivable/payable

Non debt instruments

Equity and investment fund shares

Financial derivatives and employee stock options

Hedging refers to reducing a financial riosk


It allows data to be easily accessed and viewed by any member of the public.

  • The standardized format allows for easy comparison of data across countries.
  • Comparability of data encourages peer competition to improve reporting practices.
  • The NSDP is presented in human readable format but can also be formatted to allow for instantaneous machine-to-machine transfer of data from the NSDP to a computer.
  • The NSDP facilitates monitoring of data dissemination practices.
  • Metadata are also made publicly available on the internet via the NSDP

ARC or Advance Release Calendar or when data is going to be released to public

It ensures that the public receives all data simultaneously, so that no information advantage is created for anyone in any market.

  • It demonstrates a commitment to data dissemination.
  • Compliance with the ARC is monitored by the IMF and can be monitored by anyone.
  • Frequent incidents of nonadherence to the ARC are investigated and may trigger technical assistance requests.

Linkage between main macroeconomic accounts

Balance of payments BOP

International investment position IIP

Monetary and financial statistics MFS

Government finance statistics GFS

Balance of payments BOP Which summarizes transactions between residents and nonresidents during a specific time period

International investment position  IIP, which shows at a point in time the value of: financial assets of residents of an economy that are claims on nonresidents or are gold bullion held as reserve assets; and the liabilities of residents of an economy to nonresidents;

other changes in financial assets and liabilities account, a statement that shows other flows, such as valuation changes, which reconcile the balance of payments and IIP for a specific period by showing changes due to economic events other than transactions between residents and non-residents.

The GFS focuses on the impact of government revenues, spending, lending, borrowing, on changes in net worth.

The GFS shows

  • 1. the government’s overall size
  • 2. the aggregate tax level
  • 3. the tax system’s overall structure
  • 4. the expenditure structure
  • 5. the financing requirements
  • 6. the assets and liabilities of the government

Monetary statistics cover the stocks and flows of the assets and liabilities of financial corporations, both within an economy and between units in the economy and units in the rest of the world. Financial corporations are divided into two subsectors at the highest level: depository corporations and other financial corporations. The former is then further subsectored into the central bank and the other depository corporations subsector. While financial sector coverage is the same in MFS and SNA, the transaction coverage is limited in the MFS as there is no current or capital account.

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