ABSTRACT
Separate price index numbers are calculated for imports, exports, home consumption and home investment, Changes in real income can be calculated by reducing money income to a given price-level, and checked against output statistics. These latter are based on the volume of industrial production, retail sales, employment in service industries, etc., and cover about 90 per cent of the national income. It is thus possible to calculate two independent series of quarterly data of real and money national income for the period since 1929, which confirm each other closely, from which it appears that gross national income in 1936 will rise to £5200 millions.
The real value per person in work (at 1930 prices) of home production rose from £189·5 in 1924 to £215·2 in 1930, fell slightly during the slump and started rising again in 1933. It is now £234·6. Apart from the effects of the increasing quantity of home production per head, there has been since 1929 an improvement in this country's terms of trade which has had the effect of increasing the real value of the average income per occupied worker by £9. Income from overseas investments added £16 to the average real income in 1929, and £11 in more recent years. The decline in income under this head has been more than compensated by the improved terms of trade. But a considerable part of the increased productivity of those in work has, since 1929, been thrown away in the form of increased unemployment.
