Disaggregated Economic Accounts

Working Paper: CEPR ID: DP18441

Authors: Asger Lau Andersen; Kilian Huber; Niels Johannesen; Ludwig Straub; Emil Toft Vestergaard

Abstract: We develop and analyze a new system of disaggregated economic accounts. The system breaks down national accounting positions into bilateral flows between consistently defined groups of consumers (“consumer cells”), groups of producers (“producer cells”), the government, and the rest of the world. We disaggregate the full circular flow of money, including consumer spending, labor compensation, firm surplus, foreign trade, taxes, and trade in intermediates. The measurement is comprehensive, so that the disaggregated flows add up to national aggregates and fulfill all national accounting identities. We implement the disaggregated system for small region-by-industry cells in Denmark. We present new facts on a “triangular trade” pattern across regions: spending by rural consumers disproportionately flows into urban regions, urban consumers spend more abroad, and export revenue mostly flows into rural regions. Building on a general equilibrium model with many consumer and producer cells, we illustrate that the structure of disaggregated economic accounts shapes the propagation of shocks: fiscal policy is more effective when targeted at rural consumers, and urban consumers gain the most from foreign trade.

Keywords: disaggregated economic accounts

JEL Codes: E01; E1; E2; E3; E6; F4; F6; G5; H3; R1; R2; R5

Causal Claims

Cause	Effect
structure of disaggregated economic accounts (E01)	propagation of economic shocks (F41)
fiscal policy targeting rural consumers (O23)	aggregate welfare multiplier (E16)
longer domestic circulation of funds (E50)	welfare benefit for Danish consumers (I38)
uniform reduction in export tariffs (F10)	stronger direct impact on rural consumers (R22)
stronger direct impact on rural consumers (R22)	improved welfare of urban consumers (D18)