tag:blogger.com,1999:blog-2826531655042170344.post3417999175557651868..comments2024-03-26T11:29:52.986+00:00Comments on Economic Incentives: The size of the provision for depreciationSeamushttp://www.blogger.com/profile/15679299530222667673noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2826531655042170344.post-53769025134365130432016-07-26T08:29:07.293+01:002016-07-26T08:29:07.293+01:00According to the CSO depreciation was €62 bn and G...According to the CSO depreciation was €62 bn and GFCF was only €54 bn. So the capital stock is 'naturally' declining. Not bad for an economy recording 2% employment growth and an expanding population!<br /><br />Seamus, I like your idea of using net national income as a proxy for the tax base as gross concepts get meaningless when depreciation is so large.<br /><br />The problem is that depreciation is far from a precise estimate. I am sure you are familiar with the methodology. Depreciation is simply a lagged function of investment, take away or add the odd known reclassification of IP. It is not survey-based and if you play with the parameters a little bit you can get very different results.<br /><br />This is not a criticism of the CSO (everyone does it this way) but yet again it shows that every measure now compiled according to international standards comes with a heap of caveats.<br /><br />My point is that it is called 'national' accounting for a reason. At this point the CSO are (faithfully) following a methodology to produce a number which the smartest analysts cannot use to determine the economic performance of the nation. <br /><br />It is long past time that they came up with a set a statistic which tells a plausible narrative about the Irish economy as most would describe it.<br />Anonymousnoreply@blogger.com