2.3

Investment and Fixed Assets

Investments are calculated according to the EKD classification of the firm, with the

exception of investments not directly related to the firm's main activity. For instance,

expenses on kindergartens and schools developed by a manufacturing firm are not

classified under its EKD section, but rather to other classifications (health care, education,

etc.). The investment expenses of farm households and businesses employing less than

five employees and investment expenses on individual houses are estimated. The base

for estimating investment expenses of individual houses is the floor area of dwellings

completed within a calendar year.

Fixed assets are defined as tools and other items which are used for more than one

year. The value of assets purchased before 1995 are calculated according to special rules

in order to obtain an estimated present value (due to high inflation rates in the 1990 s).

Fixed assets are classified according to the company's EKD classification. In particular,

housing units of a manufacturing firm are classified as an industrial fixed asset. The same

rule applies to hospitals or schools belonging to any firm. However, there is one exception.

Houses of farmers are not classified as assets of EKD section A ( Agriculture, Hunting and

Forestry ) but as part of the section for real estate and firms  services.

2.4

Macroeconomic Data: Summary of Main Problems and Possible Solutions

For macroeconomic analysis, long term time series data are essential for accuracy

and meaningful calculations. Unfortunately, this basic condition is not fulfilled as far as the

Polish statistical data are concerned.

First, the current classification system of firms (EKD) replaced the previous system,

Classification of National Economy (KGN), in 1994, creating difficulty in historical

comparisons between sectors. This could be partly solved by using the present system

and applying it to statistics based on the KGN. However, some rough estimation would be

necessary.  Secondly, quarterly data on GDP are not yet officially published.  Unofficial

quarterly data may be used, but in some instances the data are not very detailed. Thirdly,

the price system for calculation of the supply side of GDP was changed in 1995, in that

producer prices were replaced by a  base price.  Producer prices had been reported with

indirect taxes and tariffs; base prices are "bare" prices. This did not change GDP, but it

changed its structure by sectors. To address this problem, one may assume the structure

of indirect taxation by sectors and the sectoral structure of economy (or sectoral change

dynamics), and estimate backwards. Fourthly, income from the informal economy was

steadily introduced into the national accounts system, so additional calculations would be

needed for any consistent historical analysis.

All these changes need to be addressed, requiring strong assumptions for the

calculation of historical data. Thus, any serious regression analysis based on time series

sectoral data is both difficult to carry out and risky to report.

II 3