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Previous investigators who have discussed this problem, have been able to make only very partial adjustments for inputs. Paige and Bombach did this for fuel inputs on a rather aggregative basis, and Smith, Hitchens and Davies made some illustrative calculations (whose basis is not clear) for fuels and raw materials. However, tables 2.5 and 2.8 on input/output structurez show clearly that fuel and raw material inputs are only a small part of the problem in most industries.

Our analysis of the relation of census to GDP concepts of vtalue added helps to clarify the nature of double deflation because it demonstrates the need to deal with all input,.. Further progress can best be made, when industry of origin studias such as the present one are available for all the major sectors of the economy, i.e. for agriculture, mining, manufacturing, utilities, constructien and services. With this information and input-output tables for each of the countries under comparison, one can return to the problem of double deflation much better equipped to do a thorough job. In the case of Mexico and the USA, input-output tables are available for the census years we covered, and the 1975 table for Brazil is due rather soon, so for these three countries, this work should be feasible.

# Research Priorities

- 1) Research using the industry of origin approach can obvia -hrow new light on comparative performance across countries and i,. Ariation between branches. Such information is of major interest for g-^th analysis. For this reason, it is desirable to extend the present type of comparison to the leading manufacturing economies. Within our team in Groningen we plan to extend our present three country comparison to cover India, Japan and Korea. The NIESR in London intends to extend its previous comparisons for Germany, the UK and USA (Smith, Hitchens and Davies, 1982) to cover also France and the Netherlands. Work of this type can be self reinforcing, can be extended to incorporate capital productivity, more refined measures of labour inputs (adjusted for differences in working time and education per head) and total factor productivity.

- 2) For the three countries we covered, we would like to extend the comparison to cover the other main sectors of the economy, so that we can arrive at estimates for GDP, strengthen the methodological foundation of the industry of origin approach, and make a more careful comparison with the results of the ICP. Some work has already been done in this direction for agriculture and mining so the main task here would be to analyse the service sector. Coverage of the whole economy would make it possible to look afresh at the problem of double deflation, and to make better tests of the reliability of short-cut approaches.

# Recommendations on Official Statistics

# a) Censuses of Manufacturing

At present, the definitions of value added in manufacturing censuses are often anachronistic as they ignore inputs of services which are large and growing proportionately. They reflect the statistical practice of yesteryear, before the introduction of the more rigorous concepts of national accounts. Furthermore, these census concepts differ across countries in a way which is not adequately stressed in standard UN publications such as the Yearbook of Industrial Statistics, and this leads