Unlock the publisher's digest free
Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
Not everything is going in the world of official economic statistics. In the United Kingdom, the ons is under fire to defective data while drafting Its results to meet the budget cuts in the long term. Through the Atlantic, the main American economic personalities remain in danger of the Dogeneous Cups unleashed by Elon Musk. And to top it all, Diane Coyle's latest book suggests that by recording the most fundamental data of all – GDP – we could have measured the bad thing for decades.
Of course, Coyle is not the first economist to have expressed his dissatisfaction with regard to GDP as an international measure of default progress, nor to have asked for alternatives. Bhutan published for the first time its measure of national gross happiness in 2008. The following year, the European Commission report Stiglitz-Sen-Fitoussi provided some recommendations to go beyond GDP to a wider set of indicators.
However, with an experience at the start of his career in the British treasure and in journalism followed by long stays in the academic world and the Economic Council, Coyle – the public policy of Bennett at the University of Cambridge and co -founder of the Bennett Institute – is certainly well placed to make an argument that needs to gain both economists and politicians.
The measurement of progress Works well as an autonomous reading, but the followers of coyle work display that it is an evolution of its previous writings on GDP. Despite the sentimental adjective, 2014 GDP: a short but affectionate story concluded that the measure was increasingly inappropriate for the economies of the 21st century which are no longer dominated by manufacturing.
And in its 2017 Award -winning trial in indigoWritten with Benjamin Mitra-Kahn, Coyle went so far as to offer a potential replacement of GDP, in the form of a dashboard covering a range of indicators of natural, physical, human and social capital as well as more intangible elements such as intellectual property.
Here, Coyle builds its case more in the midst of world disturbances, in particular generative AI, cloud computing, “care”, economic dissatisfaction, geopolitical tensions and continuous impacts of climate change. Collectively, she maintains, they all know more about the credibility of GDP, part of a national account system designed in the 1940s and based on physical capital and unlimited natural resources.
The first part of the book covers a systematic explanation of the reason why GDP has followed its course. The introductory chapters cover the decision of advanced savings in the service sector and disintermediation created by “free” digital services. Time, and its relationship with technology, is a recurring theme.
Coyle describes cross -border production networks of articles such as smartphones To help highlight the gaps “yawn” in official data: “the invisibility of the economy as it is now in available statistics is extraordinary”. She emphasizes that data flows through borders are not at all measured.
A chapter on “value” focuses on the stripping of merits or not price indices, leading to delicate questions: “Do we need price clues for internet services (mainly) not taken?” This leads to a discussion on the components of wealth in order to introduce a new framework to measure economic progress. In this last chapter, Coyle is retreating slightly, its title (“A New Framework?”) With a very deliberate question mark.
Nevertheless, Coyle reduces the transition to personal well-being (“not a very useful metric for politics at the global level”), as well as alternative indices which “internalize compromises”. It also reduces, for the moment, its own previous suggestion for the deployment of dashboards given the “psychology of information processing and presentation”. Instead, among several options, Coyle offers a complete wealth framework, in fact a asset assessment and the flow of service they provide.
It ends optimistic about the power of statistical innovation to fill the gap: new sources of data combined with new methods that provide better descriptors of economic progress.
But its observation according to which many governments reduce the budgets of statistical offices at a time of great development require a note of warning for the consequences of the inaction: “the more AI reshaped business and daily life, plus the gap between the real economy and official economic statistics will be.”
The true value of The measurement of progress lies in his timing. Coyle reflects that during writing, economists, following the effects of the pandemic and the large -scale invasion of Ukraine, were respectively concerned with productivity and inflation. The GDP election is of course integrated into this program.
However, at the time of the publication of the book, the world central scene had been taken by a new trade war launched by the pricing announcements of Donald Trump aiming Bring manufacturing jobs Back to the United States. The emphasis on Coyle on a statistical infrastructure to better measure and understand where the value lies in global production networks could not be more relevant.
The measurement of progress: count what really matters by Diane Coyle Princeton £ 25, 320 pages
Alan Smith is the head of visual and data journalism of the FT
Join our online books online on Facebook in Ft Books Coffee And follow the FT weekend on Instagram And X
