The Bureau of Economic Analysis Should Lead Efforts To Improve GNP Estimates

GGD-83-1: Published: Dec 27, 1982. Publicly Released: Dec 27, 1982.

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GAO analyzed the revisions made to the gross national product (GNP) estimates over the past 13 years, presented assessments of their reliability, examined management mechanisms to determine whether improvements are needed, and evaluated what entities should manage the changes.

GAO noted that the GNP estimates provide an overview of current economic output to predict future economic activity, assess the effect of Federal policies on the economy, and identify needed economic changes. While analyses of revisions to the GNP over the past 30 years showed an overall commendable record, GAO found that: (1) the GNP components which caused most of the revisions to the estimates continue to present problems; (2) the components have been affected by recent budget cuts; and (3) current data are not available for estimating some GNP components. Further, GAO found that the size of the revisions, although small, was larger during periods of economic instability, which was troublesome to users and caused policymakers to question the reliability of the estimates. In 1977, an Office of Management and Budget (OMB) advisory committee made 155 recommendations to 24 Federal agencies to improve the GNP database; however, fewer than one-third of these recommendations have been implemented. GAO learned that data collection agencies generally implemented only those recommendations that could be accomplished at low cost to benefit their own mission or were easily done, while the most needed recommendations have not been implemented.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: If necessary, the Secretary of Commerce should have BEA budget for GNP improvements needed on a reimbursable basis that would primarily benefit GNP.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director, OMB, should use BEA prioritization and justification of GNP improvements in reviewing agencies' budget submissions which provide the data used in estimating GNP.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Commerce should then direct BEA in determining the need for data improvements to GNP to: (1) give priority attention to determining the practicality of implementing the advisory committee's recommendations directed at those GNP components identified by GAO as having relatively large revisions or insufficient data to consider in preparing quarterly estimates; (2) weigh the relative importance of those improvements to the GNP database against the need to restore reductions in source data that might affect the reliability of GNP estimates; and (3) consider the practicality along with the results of future analyses of the GNP account to determine the need for other improvements.

    Agency Affected: Department of Commerce

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director, OMB, should direct BEA to take the lead in the prioritization and justification of any requests for funds to implement the recommendations of the Advisory Committee on GNP Data Improvement or other needed improvements.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Commerce should direct BEA to take the lead in the prioritization and justification of any requests for funds to implement the recommendations of the Advisory Committee on GNP Data Improvement or other needed improvements.

    Agency Affected: Department of Commerce

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Commerce should direct the Bureau of Economic Analysis (BEA) to conduct and publish periodic analyses of the GNP account estimates, including an analysis of the revisions similar to the one performed by GAO, to determine the need for improvements and to evaluate the success of improvements already made.

    Agency Affected: Department of Commerce

  7. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director, OMB, should determine the feasibility of developing guidelines of acceptability for the GNP estimates and its components.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  8. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Commerce should determine the feasibility of developing guidelines of acceptability for the GNP estimates and its components.

    Agency Affected: Department of Commerce

  9. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: If necessary, the Director, OMB, should have BEA budget for GNP improvements needed on a reimbursable basis that would primarily benefit GNP.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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