The Statistical Discrepancy

The statistical discrepancy is equal to gross domestic product less gross domestic income. These two measures are, in principle, the same. The difference reflects less than perfect source data. The paper finds few components that statistically significantly explain the discrepancy in the last 35 years or in major subperiods, and their explanatory power is weak. The paper also finds that comprehensive benchmark revisions of the NIPAs appear to result in reductions in the explanatory power of the components that are likely to be due to reductions in measurement errors.