There are two methods to measure real growth in government consumption. One is called the output method, and the other the input method. Simply put, the output method measures the amount of products that comes out of the "factory", while the input method measures the amount of resources used in the "factory". It is basically two completely different methods for measuring the actual public consumption. With both methods, the figures are adjusted for inflation. The input method shown under this topic is not included in the calculation of GDP from 2008.
Public consumption consists of the services made available to the public by the government. It is, for example, medical treatment, education and police. Public consumption can be divided into individual and collective consumption. Individual consumption is used by individual citizens in society. It is, for example, medical treatment and schooling. Collective consumption, on the other hand, is available to the community as a whole and includes, for example, police, courts and defense.
In the national accounts, the output method replaced the input method in 2008 (i.e. including the development between 2007 and 2008). This applies in both Denmark and other EU countries. Internationally, it has been agreed that the national accounts provide the most accurate measure of real growth in individual public consumption using the output method. At the same time, the calculation of the input method is continued as a supplement to national accounts. This is because the two methods illustrate two different relevant socioeconomic themes.
If real growth in government consumption, calculated using the output method, is higher than the growth of real public consumption, calculated using the input method, it means that the amount of products that the government produces, are growing faster than the amount of resources used for that. In the long term, such a development shows that the public has become more efficient in producing the public products - productivity has grown. If the opposite is the case, the conclusion is the opposite, i.e. productivity has declined.
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