1.8 Meet the people behind the national accounts system

The idea of the national economy as continuous circulation was first introduced in France: Francois Quesnay, a practising medical doctor, sketched his Tableau Economique, a diagram of the circulation of national economy, in 1758. One hundred years previously, medical scientists had discovered the human circulatory system, and Quesnay applied the same concept to economic analysis.

The national accounts as we know them today are the result of a development effort that started in the 1930s and that has been carried on mainly in the UK and the United States.

In Europe the modern accounting system is largely the brainchild of John Maynard Keynes and Richard Stone. Lord Keynes was the creative partner who came up with the new economic ideas, Stone was a statistician who put these ideas to the practical test.

In the United States accounting was developed first and foremost by Simon Kuznets and Wassily Leontief. Leontief is regarded as the founding father of input-output research.

American and European national income researchers came together in the late 1940s. US Marshall aid was hugely important to the reconstruction of Europe after World War II, and national accounts concepts were used in channelling this aid and in monitoring its impacts. One of the Americans arriving in Europe to do this job was Richard Ruggles, who was a major influence in the development of national accounting throughout the latter half of the twentieth century.

Other names who contributed significantly to the development of accounting were economists Ragnar Frisch and Petter-Jakob Bjerve from Norway, Erik Lindahl from Sweden and Viggo Kampmann from Denmark. In Finland the first published national income calculation was compiled by K.E.F. Ignatius, head of the predecessor of the Statistical Office of Finland. Published in 1885, his statistics used tax documents to measure the income of Finnish residents in 1880.

Next lesson: Basic elements of the national accounts