Survey of current business Essay

FOR the 260th–but last–time, the masthead of the SURVEY OF
CURRENT BUSINESS carries George Jaszi’s name as director of the
Bureau of Economic Analysis (BEA) or its predecessor agency, the Office
of Business Economics. Mr. Jaszi is retiring after more than 45 years
as a civil servant. Forty-three of those years were with the Department
of Commerce: first as an economist in the National Income Division of
the Bureau of Foreign and Domestic Commerce, then as the chief of that
division beginning in 1949, as an assistant director of the Office of
Business Economics beginning in 1959, and finally as the director of the
agency beginning in 1963. Over these years, he left an indelible mark
on BEA and its work of developing and maintaining the economic accounts
of the United States.



Mr. Jaszi’s contributions go back to the very beginning of
GNP–the cornerstone of the national income and product accounts. He was
one of a team of four–the others were Edward F. Denison, the late
Milton Gilbert, and Charles F. Schwartz–who roughed out a sketch of the
two-sided economic accounts that were prepared during World War II to
provide information needed for economic mobilization. The same team
prepared the first precise formulation of the accounting system in 1947
and wrote the first detailed explanation of its conceptual framework in
1951. Shortly thereafter, Mr. Jaszi worked on the first official
measures of constant-dollar GNP, which facilitated the analysis of
cyclical movements of the economy and made possible the analysis of
economic growth, and on the extension of the accounts to show the
distribution of income by size class.

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Over the last 25 years or so, Mr. Jaszi has directed the
enhancement of BEA’s national, regional, and international economic
accounts and related tools of analysis with the goal of providing a more
sharply focused and more comprehensive picture of the U.S. economy.
Highlights of these efforts span the range of BEA’s programs:



* The national incopme and product account estimates were provided
on a more timely schedule, in more detail, and with more attention, to
separating changes in value into changes in prices and changes in
constant-price measures. The amount of quarterly information was vastly
expanded. The full quarterly presentation in the SURVEY now consists of
about 50 tables and shows not only GNP in current and constant dollars
with associated measures of prices, product component detail, national
income and personal income, corporate profits, and other well-known
measures, but also many others such as auto and truck output, inventory
stocks, gropss domestic product of corporate business, and merchandise
trade by end-use commodity category. The 130 tables usually presented
in the July SURVEY provide even more detail. For example, they include
annual estimates of income and product by industry. Further, beginning
in 1983, a quarterly “flash” estimate of major GNP aggregates
was published 15 days before the end of a quarter.



* Wealth accounts were developed as an extension of the income and
product accounts. They now cover all types to tangible
wealth–privately owned and government-owned equipment and structures,
and durable goods owned by consumers.



* The concept of the Federal budget in the framework of the
economic accounts was forged; this concept significantly influenced the
format in which the official budget has been presented since fiscal year
1969. More recently, the cyclically adjusted budget, an important
analytical tool for measuring the impact of the Federal budget on the
economy, was developed as a replacement for the high-employment budget.



* The input-output work at the Department of Commerce was started
in 1962. Its hallmark is the conceptual and statistical consistency of
input-output tables with the other branches of BEA’s economic
accounts. A number of conceptual refinements were introduced in the
main stables, and adjunct tables–for example, tables showing the
distribution of structures and equipment among acquiring
industries–were developed.


* Regional accounts were expanded to provide, in addition to the
annual income measures already available for States, quarterly measures
for States and annual measures for local areas. The preparation of
estimates was supplemented by projections of income, employment, and
population and by regional econometric models that assess the impact of
external factors on local economies.



* The U.S. balance of payments accounts were enhanced by conceptual
improvements, methodological changes to keep pace with rapid changes in
the international financial system, and presentation of more detail. In
addition, a survey-based information system relating to multinational
corporations was established.



* Pioneering estimates of pollution abatement and control
expenditures were prepared. The concepts and definitions underlying
these estimates were adopted by many countries.



* Forward-looking analysis that supplements BEA’s work on the
economic accounts was strengthened. Within the Federal Government, BEA
took a leading role in developing macroeconometric models of the U.S.
economy and currently circulates the results of its quarterly model to
key officials. The BEA plant and equipment expenditures survey was
improved in several ways, notably by the preparation of constant-dollar
estimates of actual and planned expenditures. The system of leading,
coincident, and lagging indicators was revamped in the mid-1970’s,
with special attention to the increased need to distinguish between
indicators affected by inflation and those not.



Mr. Jaszi’s work on BEA’s economic accounts was paraleled
by two activities that, while drawing upon his BEA work, also
contributed to it. First, he was one of the architects of the United
Nations system of national accounts, which is used both for
international reporting and as an aid to countries in setting up
economic accounts. As one of a group of experts convened by the League
of Nations, he worked on the first set of international guidelines for
the construction of economic accounts. Subsequently, under the auspices
of the United Nations, he participated in drafting a more comprehensive
system of economic accounts and in preparing two revisions of the
system–one in the 1960’s and one ongoing with a 1990 target date
for implementation–to adapt it to changes in economic structure,
statistical capabilities, and policy-oriented applications. Second,
throughout most of his career he taught university courses on a
part-time basis. He introduced students at American University, George
Washington University, and Georgetown University, among others, to
economic accounting, and sought to recruit his best students for BEA.



Mr. Jaszi’s influence on BEA is not, however, fully reflected
in a list of substantive enhancements of its output. His influence is
less tangible, but not less real, in other ways–for example, in how
people outside BEA view it and its work and how the organization
functions. Outsiders, from government policymakers to business
economists, respect BEA’s professionalism and integrity. Mr.
Jaszi’s own professionalism has been widely recognized. Fellow
economic accountants elected him to the chair of the Conference on
Research in Income and Wealth, their professional organization in the
United States, and the International Association for Research in Income
and Wealth. The honors he has received over the years include a
Rockefeller Public Service Award, in 1974, and a Presidential
Distinguished Executive Rank award, the highest Federal Government award
that can be earned by career civil, servants, in 1980. He has viewed
the excellence of BEA’s work as the shield behind which politically
sensitive statistics, such as GNP and the leading indicators, can be
prepared without partisan interference. Further, he has viewed the
provision of direct policy advice as the sure way to invite such
interference. Accordingly, he has pursued the former and has
scrupulously avoided the latter, and has insisted that BEA staff do the
same.



A passage from Confucius, which is visible in its frame in the
picture of Mr. Jaszi standing behind his desk at BEA, is a favorite of
his: “If concepts are not clear, words do not fit; if words do not
fit, the day’s work cannot be accomplished.” Two of the
trademarks of his directorship can be seen as the tools he used to
pursue the clarification of concepts. First, he
questioned–definitions, classifications, methodological assumptions,
thoroughness of research; little escaped. His questioning, and his
staff’s preparation for his questioning, improved the quality of
BEA’s work and, at least as importantly, set the tone for the open,
intellectual environment at BEA. He also respected others’
questioning; he insisted that BEA’s estimates and methodologies be
accessible so that others could question and that BEA staff be
responsive to questions put to them. Second, he insisted on precise
writing. Word choice, punctuation, and sentence and paragraph
structure–for internal memos as well as for BEA publications–were all
matters of concern. His name on the SURVEY’S masthead has not
represented merely organizational hierarchy; he actively reviewed SURVEY
articles in pursuit of cogency and precision. For the future, it will
be a worthy goal for the SURVEY, and for BEA, to maintain the standards
he set.

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