Factor decomposition of fluctuation in GDP deflator using SNA IO-Tables(in Japanese)

Japan's GDP deflator continues to fall. Deviations from other price indices are also seen. Consumer Price Index and Corporate Goods Price Index measure the price trend of the goods and service. On the contrary, GDP deflator is characterized by deflator of value- added. System of National Accounts (SNA) estimates real GDP from production side using double- deflation method which deflates both output and input of production. This paper examines the method for decomposing changes in GDP deflator in accordance with the deflation method of SNA, by using the SNA- Input- Output- Tables. The SNA- Input- Output- Tables are based on producers' prices. This paper treat output prices and input prices as producer prices and a circulation margins. Effects of producer prices will affect both output and input prices. The SNA- Input- Output- Tables are compiled in the manner of competitive import where the domestic product and the import are added and recorded in the same cell. This paper separates the influence of the composition change from an input price and analyzes the influence of import price change etc. Consequently, this paper formulize the method to decompose the change of a GDP deflator into 1) industrial structure factor, 2) input structure factor, 3) producer price factors, 4) item- composition- factor which show the influence of import price change etc. and 5) distribution sector factor. The formulization shows that 1). although the price increase of domestic products is raising factor and the price increase of imports is a falling factor for GDP deflator, the size of influence depends on disposition rate of the products in final demand, and that 2) Whether change of input structure raise or lower the GDP deflator depends on relative level of the input deflator compared with GDP deflator. Formulization of such factor decomposition is not necessarily unique. In the process of formulization, this paper compares two cases in formulating industrial structure factor. The one is measured by real output, and the other is measured by real value- added. This paper also compares two cases in decomposing the industrial structure factor into contributions of respective industries. The one treats any increase of industrial share as .raising factor for GDP deflator. The other treats respective industries as raising factor when change in the share of respective industries contributes to the movements of industrial structure as a whole which raise GDP deflator. The latter case means that losing share of the industry with relative low value- added deflator is recorded as raising factor for GDP deflator. Because it implies that other industries with relative high value- added increase their share. Usually the change in GDP deflator is analyzed through 1) regression analysis which relates GDP deflator with profits or wages, or 2) decomposition of GDP deflator into deflators of demand- items in final demand. Because the SNA- Input- Output- Table is conformably compiled with SNA, the factor decomposition of this paper does not produce residual error with commonly used GDP deflator. And this method conforms to the feature of GDP deflator as value- added deflator. These are merits of this method. Next this paper applies the above formula to "GDP deflator change in 1995- 2002" and extracts factors, such as producer price, distribution sector, industrial structure and input structure. The influences are also summed up by items to have a correspondence with other price indices where contributions of respective items are usually analyzed. The results show the size of the influences of the price fall of ICT products, the price rise of crude oil, construction depression, etc. It also indicates that the influence of a distribution sector became large and falling prices became wide range, after '99 when GDP deflator expanded fall width. The influence of the distribution sector came from an asymmetrical movement, that is, price of output fell in distribution sector while price of input from distribution sector rose. SNA is now shifting the calculation method of real value and deflator, to a chain system from a fixed- base- year system used in this paper. This paper shows in the appendix that the similar factor- decomposition method can be applied even in the case of a chain system.