By Cadman Atta Mills
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Additional info for Analytical approaches to stabilization and adjustment programs
Page 12 The sum of wages, salaries, the incomes of own-account producers (that is, compensation of employees, as these three items are referred to in the United Nations System of National Accounts (SNA)) and the operating surplus of all enterprises (including funds set aside for depreciation by producing units) is value added at producers' value or at factor costs (Yfc) as opposed to purchasers' value or market prices (Ymp). By convention, value added at producers' value accrues to households (and to the government in the case of the operating surplus of government owned enterprises) even though a portion of the operating surplus might be retained by enterprises on behalf of households or the government to finance accumulation.
In other words, there should be a user cost involved in the use of natural capital. A country can spend the net income earned from the use of natural capital (receipts net of extraction costs) on present consumption or future consumption (investment), or any combination of the two. " The methodology of conversion of value of assets into a flow of permanent income stream is found in Fisher (1930), Ando and Modigliani (1963), Friedman (1957), and Duesenberry (1949), among others. For economic policy it is necessary to estimate the proportion of net receipts (ß) from the sales of a depletable natural resource (net of extraction cost) that can truly be called income (¥).
Economic Models and Policymakers There is a symbiosis between models and policymaking. Policymakers do not live and die by economic models; they do, however, depend on models to provide information about various policy responses and tradeoffs. Economic models are developed depending on the policymakers' statements of economic problems and their policy objectives. Economic policymaking and management generally draw upon economic models or frameworks implicitly or explicitly. Similarly, in their consultations and negotiations with officials of developing countries, the World Bank and the IMF use frameworks to ascertain borrowing needs of countries, as well as to analyze the implications of various policy prescriptions and conditions on the economies in question.
Analytical approaches to stabilization and adjustment programs by Cadman Atta Mills