National Accounting Systems and the European Recovery Program.

Abstract The article describes the development of the national accounts or social accounts. The article also summarizes the present economic situation in Western Europe and changes in it which the European Recovery Program is intended to bring out. The significance of social accounts can be described by indicating briefly how they developed out of the study of national income. National income is, of course, the income derived from production by all people and enterprises in the economic system, that is, total wages and salaries, rents, interest and profits. From the earliest days of its measurement, national income has been regarded not merely as a measure of income but also as a measure of the economic system's total output. However, the exact relationship between income and output was clearly seen only when it was realized that national income measurement is best thought of as double entry bookkeeping, involving the consolidation of the operating accounts of all productive enterprises in the economic system, including government. Those parts of the consolidated operating account which are pertinent for purposes of national income measurement are revenue from sales and the disposition of revenue from sales.