1.4 The individual in the national accounts

Even though the national accounts are not designed to describe individuals and what they do, each of us forms a small part of the national economy and our activities show up in the national accounts in one way or another, for instance as follows:

The national accounts register all the economic activities of all the economic units in the national economy. The system is very comprehensive in its coverage of people's economic activity. However it is important to remember that the individual him- or herself is not part of the national accounts. This means, among other things, that the system does not need to set any monetary value to the individual or the individual's personal attributes. For example, human capital assets, which certainly impact the economy in various different ways, are not included under capital formation.

The national accounts also aim to cover and register the so-called grey economy, i.e. legal economic activities on which (for one reason or another) there are no official records. Failing to comply with their duties of registration, units operating in the grey economy want to cut personnel expenses and avoid paying taxes. The size of the grey economy in different industries is estimated on the basis of separate surveys and data from existing sources.

Illegal or criminal activity does not as yet fully show up in the Finnish national accounts. According to UN guidelines (System on National Accounts 1993 or SNA93), the illegal economy should be included in GDP figures. This issue is currently being debated in the EU. In some countries the illegal economy may be quite considerable: if it is excluded, the GDP figures will be distorted and give an inaccurate picture of the national economy concerned. One major difficulty is that data on the illegal economy are always and necessarily estimates, which obviously makes them highly unreliable.

Examples