Lecture 3 summary

Lecture 3
Deconsolidated account of Account 3 of NIPA
Deconsolidated account of Account 3 of NIPA:
Consolidated Account 3 format:

GROSS CAPITAL FORMATION AND FINANCING

Ifix SH
inv SC
SG
Net Saving
Cons of fixed cap
Gross Saving
Net cap inflow from ROW
G+FR
Gross cap formation (I) Financing of I

- NIPA accounts → consolidated format
- NFA (National Financial Account) → deconsolidated format
o Able to see how each instututional sector contributed to gross savings
o Able to see how the funds are spent by each sector for the purchase of
what types of assets over the accounting period
- Definition for Account 3 NFA:
o the systematic and meaningful recording of financial transactions between
different sectors of the economy, with the purpose of assisting policy
makers in analysing the financial position of the national economy as well
as sub-sectors of the economy.
▪ Also known as the “Flow-of-funds Account”
▪ Links financial flows to real economic activity




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