TECHNICAL ADVISORY GROUP Inaugural Meeting March 24, 2017 - PowerPoint PPT Presentation

TECHNICAL ADVISORY GROUP Inaugural Meeting March 24, 2017 Princeton University, New Jersey

Agenda � Introduction of the Technical Advisory Group Members � ICP Governance Framework and Terms of Reference of the Technical Advisory Group � New ICP Approach and the 2017 Comparison Cycle � ICP Research Agenda � Setting up ICP Task Forces 2

TECHNICAL ADVISORY GROUP (TAG) MEMBERS 3

TAG Members � ALAN HESTON , Professor Emeritus, University of Pennsylvania, Co-founder of the ICP � ANA REVENGA, Deputy Chief Economist of the World Bank � SIR ANGUS DEATON, 2015 Nobel Prize Laureate in Economics, Princeton University [Chair] � D. PRASADA RAO, Professor, University of Queensland � PAUL SCHREYER, Deputy Chief Statistician of the OECD [ Alternate Chair] 4

TAG Members � PRONAB SEN, former Chief Statistician of India � ROBERT C. FEENSTRA, Professor, University of California – Davis � W. ERWIN DIEWERT, Professor, University of British Columbia � WALTER RADERMACHER, former Chief Statistician of the EU & Germany � XIANCHUN XU, former Deputy Commissioner of NBS China 5

ICP GOVERNANCE FRAMEWORK AND TAG TERMS OF REFERENCE 6

ICP Governance Framework GIA = Global Implementing Agency, RIA = Regional Implementing Agency, NIA = National Implementing Agency

Governing Board � Strategic and policy-making body � Approves methodology � Sets policies and protocols for PPP production � Ensures that ICP results are consistent with agreed policies, protocols and methodology � Advocates, conducts outreach, promotes openness, raises funding 8

Inter-Agency Coordination Group � Coordinating body for program implementation � Establishes data collection, validation, calculation and dissemination work plans � Develops common standards and protocols to ensure comparability across regions and countries � Provides quality assurance standards that national and regional data and metadata must satisfy to be included in the global PPP estimates 9

World Bank Global ICP Unit � Coordinates and manages the ICP globally � Provides secretariat functions for governance bodies � Calculates and disseminates global results � Delivers technical support to regions � Implements the ICP dissemination and access policy 10

Regional Implementing Agencies* � Coordinate and manage regional comparisons/ Eurostat-OECD program � Carry out regional capacity-building and technical assistance activities � Ensure adequate national and regional data and metadata quality as per the agreed standards � Calculate and disseminate regional results * and Eurostat and OECD 11

National Implementing Agencies � Conduct country activities � Collect and compile the data and metadata required for estimating PPPs � Ensure adequate national data and metadata quality per the agreed standards 12

TAG � Technical body � Assures methodological soundness and overall quality of the PPP estimates � Ensures transparency of the PPP estimation process � Supports the establishment of a permanent and more frequent ICP � The TAG, in collaboration with IACG, sets the ICP research agenda � The TAG establishes Task Forces to undertake research into specific technical issues on the research agenda and support the computation of ICP results. 13

TAG Work Modality � TAG holds regular annual meetings to • Discuss Task Forces’ proposals on methodological improvements under the research agenda • Review the overall quality of PPP estimates � Ad-hoc meetings may be organized, if need arises � The Global ICP Unit serves as TAG secretariat 14

NEW ICP APPROACH AND THE IMPLEMENTATION OF THE 2017 COMPARISON CYCLE 15

Aspiration: Rolling Survey Approach � Spreads the price data collection over 3 years, in order to ease the burden on countries for any given calendar year � Allows regions the flexibility to conduct surveys according to their specific circumstances � Designed to make comparisons using a mix of actual and extrapolated data that have been collected over 3 years 16

Interim ICP Activities � Keep ICP momentum through interim regional comparisons • Asia 2015/2016 • CIS 2014 • Western Asia 2016 (plus results for 2012/2013) • Eurostat-OECD regular PPP program � Maintain capacity through multiple regional workshops and E-learning course (underway) � Increase outreach through seminars, website, video tutorials, papers, leaflets, blogs, and newsletters 17

ICP Timetable 2016-2018 � Conduct new ICP surveys � Incorporate interim surveys conducted in 2016, where possible End 2019 � Link results of interim regional exercises conducted during 2012-2016 and produce global PPP time series � Publish ICP 2017 results 2020 and beyond � Implement gradually the rolling survey approach to produce results every three years 18

ICP 2017 Cycle ICP 2017 Cycle 2016 2017 2018 2019 Household consumption X => X < = X Housing volume and rentals X < = X PUBLICATION Government compensation X < = X Machinery and equipment X < = X Construction and civil engineering X < = X CPIs, PPIs and national account deflators X X X National account expenditures X X X 19

Future ICP Cycles ICP 2020 Cycle ICP 2023 Cycle 2019 2020 2021 2022 2022 2023 2024 2025 Household consumption X=> X <=X X=> X <=X PUBLICATION OF 2020 RESULTS PUBLICATION OF 2023 RESULTS Housing volume and rentals X X Government compensation X X Machinery and equipment X X Construction and civil engineering X X CPIs, PPIs and national account X X X X X X deflators National account expenditures X X X X X X 20

ICP RESEARCH AGENDA CONTEXT 21

Background � The last half-century has seen the ICP grow into a global statistical program � Each round of ICP has increased country participation, and improved the methods and governance of the program � ICP has reached a stage where it needs to identify its future direction and sustainability 22

Opportunities � United Nations mandate • “A truly permanent global program” � Stable home • Global ICP Unit at the World Bank � Opportunity to modernize, innovate and improve • Data revolution 23

Challenges � Establishing ICP within the work program of the global, regional and national implementing agencies and securing sustainable funding � Conducting frequent and regular cycles of ICP through the introduction of a rolling survey approach � Ensuring the quality, reliability and consistency of PPPs 24

Consultations � IACG • Second meeting, Washington DC (September 2016) � Experts • Meeting in MIT, Boston (May 2016) • World Bank management and experts (March 2017) � Countries • Various regional workshops and events (2016-2017) 25

Research Agenda � Focus on methodological aspects related to building PPP time series and fine-tuning established methods and procedures to improve quality � Innovations as a cross-cutting theme to ensure that new approaches, technologies, and data sources are utilized in the production of PPPs � Suggested Research Agenda includes: • Immediate term items • Medium term items • Ongoing and longer term items 26

RESEARCH AGENDA FOR THE IMMEDIATE TERM 27

I. PPP Time Series & Rolling Survey Approach � Issue: Extrapolations of PPPs at the aggregate level over long periods intervening the benchmark comparisons, coupled with major methodological changes between benchmarks, limit the ability to reconcile extrapolations from different benchmarks. � Three components: a. Moving Towards Rolling Price Surveys b. Linking Interim Regional Updates into a Global Comparison c. Building PPP Time Series for the Interim Period 28

I.a. Moving Towards Rolling Price Surveys AREAS TO EXAMINE � Determine the frequency of data collection for the rolling survey for each aggregate of the GDP � Assess availability and quality of national account deflators, CPIs and other price indices to be used in extrapolation to the reference year � Determine how to link PPPs from regions with different timetables for data collection � Assess methods of extrapolating PPPs for the two years between individual benchmarks, before the full rolling survey approach is implemented 29

I.b. Linking Interim Regional Updates AREAS TO EXAMINE � Effect of different timing of regional interim surveys � Impact of different degrees of coverage of the GDP � Effect of changing regional composition and of countries not participating in regional interim updates � Effect of discrepancies in global core list coverage by region on linking � Effect of methodological differences between regions on linking 30

I.c. Building “Interim” PPP Time Series AREAS TO EXAMINE � Assess availability and quality of national account deflators, CPIs and other price indices by GDP component � Examine consistency of CPI weights and national account weights, and assess the weights’ effects on PPPs � Suggest steps for statistical capacity-building to ensure that CPIs and national account deflators are consistent over time and comparable across countries � Ensure consistency between the 2011 and 2017 results and the comparisons for the intervening years 31