National Income Accounting

Key Limitations

  1. Non-Monetary Transactions: Activities such as barter trade and household work are not included, leading to an underestimation of economic activity.
  2. Informal Sector Exclusion: The informal economy, which is significant in many countries, is often poorly accounted for.
  3. Quality of Data: Data inaccuracies and incomplete reporting can distort national income calculations.
  4. Environmental Costs: Depletion of natural resou