THE USES OF THE ESA

Framework for analysis and policy

1.03 The ESA framework can be used to analyse and evaluate:

  1. the structure of a total economy. Cases in point are:

    (1) value added and employment by industry;

    (2) value added and employment by region;

    (3) income distributed by sector;

    (4) imports and exports by product group;

    (5) final consumption expenditure by product group;

    (6) fixed capital formation and fixed capital stock by industry;

    (7) the composition of the stocks and flows of financial assets by type of asset and by sector.

  2. specific parts or aspects of a total economy. Cases in point are:

    (1) banking and finance in the national economy;

    (2) the role of government;

    (3) the economy of a specific region (in comparison to that of the nation as a whole).

  3. the development of a total economy over time. Cases in point are:

    (1) the analysis of GDP growth rates;

    (2) he analysis of inflation;

    (3) the analysis of seasonal patterns in household expenditure on the basis of quarterly accounts;

    (4) the analysis of the changing importance of particular types of financial instruments over time, e.g. the increased importance of options;

    (5) the comparison of the industrial structures of the national economy over the long term, e.g. over a period of thirty years.

  4. a total economy in relation to other total economies. Cases in point are:

    (1) the comparison of the roles of government in the Member States of the European Union;

    (2) the analysis of the interdependencies between the economies of the European Union;

    (3) the analysis of the composition and destination of the exports of the European Union;

    (4) the comparison of GDP growth rates or disposable income per capita in the European Union and in the United States and Japan.

1.04 For the EU and its Member States, the figures from this framework play a major role in formulating and monitoring their social and economic policy.

Furthermore, there are some very important specific uses:

  1. for monitoring and guiding European monetary policy: the criteria of convergence for the European Monetary Union have been defined in terms of national accounts figures (government deficit, government debt and GDP);
  2. for granting monetary support to regions in the EU: the expenditure for the Structural Funds of the EU is partly based on regionalised national accounts figures;
  3. for determining the own resources of the EU. The latter depend on national accounts figures in three ways:

    (1) the total resources for the EU are determined as a percentage of the Member States' gross national products (GNP);

    (2) the third own resource of the EU is the VAT own resource. The contributions by the Member States for this resource are largely affected by national accounts figures, because they are used to calculate the average VAT rate;

    (3) the relative sizes of the contributions by the Member States for the fourth own resource of the EU are based on their gross national products.