Measuring Wealth and Financial Intermediation and Their Links to the Real Economy

Charles R. Hulten, Marshall B. Reinsdorf, Charles R. Hulten, Marshall B. Reinsdorf

• Publisher: University of Chicago Press
• Year: 2015
• Print ISBN: 9780226204260
• eBook ISBN: 9780226204437
• Topic: Business
• Subtopic: Business General
• Index: Business

More than half a decade has passed since the bursting of the housing bubble and the collapse of Lehman Brothers. In retrospect, what is surprising is that these events and their consequences came as such a surprise. What was it that prevented most of the world from recognizing the impending crisis and, looking ahead, what needs to be done to prevent something similar?
           
Measuring Wealth and Financial Intermediation and Their Links to the Real Economy identifies measurement problems associated with the financial crisis and improvements in measurement that may prevent future crises, taking account of the dynamism of the financial marketplace in which measures that once worked well become misleading. In addition to advances in measuring financial activity, the contributors also investigate the effects of the crisis on households and nonfinancial businesses. They show that households' experiences varied greatly and some even experienced gains in wealth, while nonfinancial businesses' lack of access to credit in the recession may have been a more important factor than the effects of policies stimulating demand.

II

Advances in Measuring Wealth and Financial Flows

6

Adding Actuarial Estimates of Defined-Benefit Pension Plans to National Accounts

Dominique Durant, David Lenze, and Marshall B. Reinsdorf*

The paucity of data on the growing risks to financial stability during the run-up to the financial crisis of 2007–2008 has highlighted the need for better data on the entities classified in the financial corporations sector in the System of National Accounts (SNA). For countries with high levels of participation in employer-sponsored defined-benefit (DB) plans, national accounts will take an important step toward this objective with the introduction of the new actuarial measures of DB pension plans that are recommended in the 2008 SNA (United Nations Statistical Division 2009). The 2008 SNA (17.191–17.206) also calls for a supplementary table showing actuarial measures of government-sponsored plans that will allow comparisons between countries where employer-sponsored DB pension plans have a major role in providing retirement income and countries where government-sponsored plans predominate. For both kinds of countries the new measures will provide a more complete picture of saving and wealth of households, and of pension expenses and pension liabilities of employers.

In many countries, including the United States and France, social security provides a base level of retirement income, with an overlay of a supplementary system of government-sponsored or employer-sponsored pension plans. Social security plans generally differ from other government-sponsored plans in the main features of their benefit formulas (the social security formula may have a benefit ceiling and may consider earnings over virtually the entire working-age portion of the life cycle, ...

Table of contents

• Cover
• Copyright
• Title Page
• Series Page
• National Bureau of Economic Research
• Relation of the Directors to the Work and Publications of the National Bureau of Economic Research
• Contents
• Prefatory Note
• Introduction
• I. Advancing Economic and Financial Measurement Practice: Lessons from the Financial Crisis
• II. Advances in Measuring Wealth and Financial Flows
• III. How Did the Financial Crisis Affect Households and Businesses?
• Notes
• Contributors
• Author Index
• Subject Index