Survey of current business Essay

FOR the 260th–but last–time, the masthead of the SURVEY OFCURRENT BUSINESS carries George Jaszi’s name as director of theBureau of Economic Analysis (BEA) or its predecessor agency, the Officeof Business Economics.

Mr. Jaszi is retiring after more than 45 yearsas a civil servant. Forty-three of those years were with the Departmentof Commerce: first as an economist in the National Income Division ofthe Bureau of Foreign and Domestic Commerce, then as the chief of thatdivision beginning in 1949, as an assistant director of the Office ofBusiness Economics beginning in 1959, and finally as the director of theagency beginning in 1963. Over these years, he left an indelible markon BEA and its work of developing and maintaining the economic accountsof the United States. Mr.

Jaszi’s contributions go back to the very beginning ofGNP–the cornerstone of the national income and product accounts. He wasone of a team of four–the others were Edward F. Denison, the lateMilton Gilbert, and Charles F. Schwartz–who roughed out a sketch of thetwo-sided economic accounts that were prepared during World War II toprovide information needed for economic mobilization.

The same teamprepared the first precise formulation of the accounting system in 1947and wrote the first detailed explanation of its conceptual framework in1951. Shortly thereafter, Mr. Jaszi worked on the first officialmeasures of constant-dollar GNP, which facilitated the analysis ofcyclical movements of the economy and made possible the analysis ofeconomic growth, and on the extension of the accounts to show thedistribution of income by size class. Over the last 25 years or so, Mr. Jaszi has directed theenhancement of BEA’s national, regional, and international economicaccounts and related tools of analysis with the goal of providing a moresharply 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 providedon a more timely schedule, in more detail, and with more attention, toseparating changes in value into changes in prices and changes inconstant-price measures. The amount of quarterly information was vastlyexpanded.

The full quarterly presentation in the SURVEY now consists ofabout 50 tables and shows not only GNP in current and constant dollarswith associated measures of prices, product component detail, nationalincome and personal income, corporate profits, and other well-knownmeasures, but also many others such as auto and truck output, inventorystocks, gropss domestic product of corporate business, and merchandisetrade by end-use commodity category. The 130 tables usually presentedin the July SURVEY provide even more detail. For example, they includeannual estimates of income and product by industry. Further, beginningin 1983, a quarterly “flash” estimate of major GNP aggregateswas published 15 days before the end of a quarter. * Wealth accounts were developed as an extension of the income andproduct accounts. They now cover all types to tangiblewealth–privately owned and government-owned equipment and structures,and durable goods owned by consumers. * The concept of the Federal budget in the framework of theeconomic accounts was forged; this concept significantly influenced theformat in which the official budget has been presented since fiscal year1969. More recently, the cyclically adjusted budget, an importantanalytical tool for measuring the impact of the Federal budget on theeconomy, was developed as a replacement for the high-employment budget.

* The input-output work at the Department of Commerce was startedin 1962. Its hallmark is the conceptual and statistical consistency ofinput-output tables with the other branches of BEA’s economicaccounts. A number of conceptual refinements were introduced in themain stables, and adjunct tables–for example, tables showing thedistribution of structures and equipment among acquiringindustries–were developed.

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

S. balance of payments accounts were enhanced by conceptualimprovements, methodological changes to keep pace with rapid changes inthe international financial system, and presentation of more detail. Inaddition, a survey-based information system relating to multinationalcorporations was established.

* Pioneering estimates of pollution abatement and controlexpenditures were prepared. The concepts and definitions underlyingthese estimates were adopted by many countries. * Forward-looking analysis that supplements BEA’s work on theeconomic accounts was strengthened. Within the Federal Government, BEAtook a leading role in developing macroeconometric models of the U.S.economy and currently circulates the results of its quarterly model tokey officials. The BEA plant and equipment expenditures survey wasimproved in several ways, notably by the preparation of constant-dollarestimates 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 betweenindicators affected by inflation and those not. Mr. Jaszi’s work on BEA’s economic accounts was paraleledby two activities that, while drawing upon his BEA work, alsocontributed to it. First, he was one of the architects of the UnitedNations system of national accounts, which is used both forinternational reporting and as an aid to countries in setting upeconomic accounts. As one of a group of experts convened by the Leagueof Nations, he worked on the first set of international guidelines forthe construction of economic accounts. Subsequently, under the auspicesof the United Nations, he participated in drafting a more comprehensivesystem of economic accounts and in preparing two revisions of thesystem–one in the 1960’s and one ongoing with a 1990 target datefor 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 apart-time basis. He introduced students at American University, GeorgeWashington University, and Georgetown University, among others, toeconomic accounting, and sought to recruit his best students for BEA. Mr. Jaszi’s influence on BEA is not, however, fully reflectedin a list of substantive enhancements of its output. His influence isless tangible, but not less real, in other ways–for example, in howpeople outside BEA view it and its work and how the organizationfunctions. Outsiders, from government policymakers to businesseconomists, respect BEA’s professionalism and integrity. Mr.

Jaszi’s own professionalism has been widely recognized. Felloweconomic accountants elected him to the chair of the Conference onResearch in Income and Wealth, their professional organization in theUnited States, and the International Association for Research in Incomeand Wealth. The honors he has received over the years include aRockefeller Public Service Award, in 1974, and a PresidentialDistinguished Executive Rank award, the highest Federal Government awardthat can be earned by career civil, servants, in 1980. He has viewedthe excellence of BEA’s work as the shield behind which politicallysensitive statistics, such as GNP and the leading indicators, can beprepared without partisan interference. Further, he has viewed theprovision of direct policy advice as the sure way to invite suchinterference. Accordingly, he has pursued the former and hasscrupulously avoided the latter, and has insisted that BEA staff do thesame. A passage from Confucius, which is visible in its frame in thepicture of Mr.

Jaszi standing behind his desk at BEA, is a favorite ofhis: “If concepts are not clear, words do not fit; if words do notfit, the day’s work cannot be accomplished.” Two of thetrademarks of his directorship can be seen as the tools he used topursue the clarification of concepts. First, hequestioned–definitions, classifications, methodological assumptions,thoroughness of research; little escaped. His questioning, and hisstaff’s preparation for his questioning, improved the quality ofBEA’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 beaccessible so that others could question and that BEA staff beresponsive to questions put to them.

Second, he insisted on precisewriting. Word choice, punctuation, and sentence and paragraphstructure–for internal memos as well as for BEA publications–were allmatters of concern. His name on the SURVEY’S masthead has notrepresented merely organizational hierarchy; he actively reviewed SURVEYarticles in pursuit of cogency and precision. For the future, it willbe a worthy goal for the SURVEY, and for BEA, to maintain the standardshe set.

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