An Exploration Of The Methods Of Accounting The Non-observed Economy In China

The task of National accounts is to account the total economy comprehensive, and to provide reference for policy-makers to make macroeconomic policy. In practice, there will be some economic activities missed from the current statistical system due to various reasons, which become a "non-observed economy"(NOE). Not accounting the NOE will undermine the comprehensiveness and accuracy of the national accounts, hence lead to a series of adverse consequences. This paper introduced the definition and other related issues of the NOE, focused on the accounting methods and the application of them.This paper started from the definition of the NOE and it's content, introduced the definition and the scope of the NOE of Organization for Economic Cooperation and Development (OECD) and domestic academic community. Put forward the opinion on the definition of the NOE according to the existing research results and the specific situation in China. Expounded the foreign theory and the methods of accounting systematically, especially discussed the application of the labour input method, analyzed the applicable conditions of them, and evaluated the advantages and disadvantages of them in depth. Made empirical analysis on the methods of accounting the scale of NOE in our country. On the basis of reaserch of various methods, proposed estimation methods suitable for Our country, constructed a new money demand model different from the past by analyzing China's money supply and demand and the characteristics of the NOE, estimated the NOE of China by this model from 1990-1996. The results showed that there still be quite a large scale of NOE that didn't inplude in national account after adjusted GDP with economic census data, It accounts for about 10% of GDP. The estimation result is consistent with the speculation made from macroeconomic trends. Proposed the direction to improve. Finally, put forward reasonable suggestions on how to improve the national accounts to establish an accounting system of the NOE in our country. The suggestions include: first, establish a concept framework of the NOE as soon as possible, introduce the concept of the NOE and other related concepts. Second, improve the basic data collection method and the accounts compilation method. In the improving process, identify priorities to improve and develop a detailed implementation plan to guide the improving work.