RESEARCH March 28, 2018

Disaggregating growth

Measuring who prospers when the economy grows


The National Income and Product Accounts, or NIPA (also referred to as System of National Accounts, or SNA, outside of the United States), were a radical advance in economic measurement when they were instituted in the early 20th century. These accounts track aggregate output and income for the national economy. Most notably, they measure Gross Domestic Product and the quarterly fluctuations in GDP that tell us if the economy is growing or contracting. Before their advent, ascertaining the health of the economy was an inexact and patchwork procedure.

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Disaggregating Growth Report

Key Takeaways

  • The measurement of Gross Domestic Product has fostered a national fixation on “growing the pie” that ignores how growth is distributed. That conventional wisdom has become antiquated, as more and more of the nation’s growth has benefitted the top 1 percent.
  • Policymakers interested in combatting rising income inequality cannot evaluate the effectiveness of their policies without a consistent, high-quality measure of how economic growth is distributed.
  • Existing statistics on inequality and the distribution of economic gains produced by the federal government do not account for all income, vastly underestimate the income of top earners, or are not given the level of attention received by other major economic statistical products.
  • A distributional component could be added to the National Income and Product Accounts now, at least in part. The United States could include many of the most desirable features of such a system, although some others may require investments in new statistical infrastructure.
  • To create an accurate system of distributional accounts requires the Bureau of Economic Analysis to have expanded access to tax data held by the Statistics of Income division of the Internal Revenue Service.


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