Friday, March 23, 2018

Global firms


STEFAN AVDJIEV, Bank for International Settlements (BIS)
Email: stefan.avdjiev@bis.org
MARY EVERETT,
Central Bank of Ireland
Email: mary.everett@centralbank.ie
PHILIP R. LANE,
Trinity College (Dublin) - Department of Economics, Centre for Economic Policy Research (CEPR), Central Bank of Ireland
Email: plane@tcd.ie
HYUN SONG SHIN,
Bank for International Settlements
Email: hyunsong.shin@bis.org
As the global economy becomes more integrated, there is a growing tension between the nature of economic activity and the measurement system that attempts to keep up with it. Many policies are still determined by measuring economic activity at the national level. Since the typical unit of analysis is the economic area (the “island”), economic activity is measured within the island and in terms of transactions between islands. But, increasingly, companies and their ownership are global, with economic activity taking place in a geographically dispersed way. We analyse several important issues created by this tension, show how they manifest themselves in the data and draw lessons from them.

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