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Working Group on Wealth

This working group focuses on the importance of wealth accounts for National Transfer Accounts (NTA) and discusses key issues related to assets and transfer wealth. It explores methods to estimate assets, age-specific asset allocation, and forecasting transfer flows.

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Working Group on Wealth

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Presentation Transcript

  1. Working Group on Wealth NTA 7 June 2010

  2. Some Basics • Long-term goal of NTA is to construct a complete set of accounts • Flow accounts are very useful • But for answering other questions wealth accounts are very helpful (comparing generation is an example) • SNA provides a useful framework for completing the accounts. • A(t+1)=A(t) + S(t) + asset transfers (t) + other changes in assets (t)

  3. Components • Asset transfers • Transfers of existing assets by governments • Bequests • Other asset transfers, e.g., dowry, bride price • Transfers due to changes in living arrangements • Other changes • Natural catastrophes and other non-economic events • Changes in asset prices

  4. What distinguishes NTA from SNA • Incorporating age into the accounts • More complete accounting of intergenerational • W(x+1,t+1) = W(x,t) + S’(x,t) + wealth transfers (x,t) + other changes in wealth (x,t) • W = A + T • S’ refers to the accumulation of assets (S) and the accumulation of transfer wealth.

  5. How should we proceed? • Priority • Wealth accounts • Asset (or wealth) transfer accounts • Other components of a full NTA system are interesting but lower priority • Wealth accounts is the topic of this working group

  6. Issues • Assets • Is a balance sheet available for the country? • If not, is there some useful way to construct an estimate of assets? • What methods can be used to assign assets by age • Surveys with assets by age of head? • Rely on age profile of asset income? • How do we treat public debt?

  7. Issues • Transfer wealth • How do we forecast/project transfer inflows and outflows? • How do we decide on an appropriate discount rate?

  8. Discussion and next steps

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