I. INTRODUCTION
C. The institutional sectors of the economy
| 1.13. | The purpose of this section is to indicate very briefly what are the main sectors of the economy for which it is possible to compile the full sequence of accounts summarized in the previous section. Two main kinds of institutional units, or transactors, are distinguished in the System - households and legal entities. The latter are either entities created for purposes of production, mainly corporations and non-profit institutions (NPIs), or government units, including social security funds. Institutional units are essentially units that are capable of owning goods and assets, incurring liabilities and engaging in economic activities and transactions with other units in their own right. For the purposes of the System, institutional units that are resident in the economy are grouped together into five mutually exclusive sectors composed of the following types of units:
Non-financial corporations
Financial corporations
Government units, including social security funds
NPIs serving households (NPISHs)
Households.
The five sectors together make up the total economy. Each sector is also divided into sub-sectors. For example, the non-financial and financial corporations sectors are divided to distinguish corporations subject to control by Governments or foreign units from other corporations. The System makes provision for a complete set of flow accounts and balance sheets to be compiled for each sector, and sub-sector if desired, as well as for the total economy. The total number of accounts that may be compiled is therefore potentially quite large, depending upon the level of disaggregation that is required and feasible. Only by disaggregation into sectors and sub-sectors is it possible to observe the interactions between the different parts of the economy that need to be measured and analysed for purposes of policy-making. The complete set of accounts at the level of the five main sectors is shown in annex V at the end of this manual. |
| 1.14. | Institutional units that are resident abroad form the rest of the world. The System does not require accounts to be compiled in respect of economic activities taking place in the rest of the world, but all transactions between resident and non-resident units have to be recorded in order to obtain a complete accounting for the economic behaviour of resident units. Transactions between residents and non-residents are grouped together in a single account, the rest of the world account. |
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