EP 962 Is GDP Still the Best Way to Measure the Performance of the Economy?

 

 

The ways that statisticians and governments measure the economy were developed in the 1940’s, when the urgent economic problems were totally different from those of our times.  In her book “The Measure of Progress: Counting What Really Matters”, Cambridge professor, Diane Coyle, helps us understand how inadequate our system for assessing the economy is as it is undergoing a radical digital transformation.  Particularly lagging is the key measurement, that being the measure of Gross Domestic Product, the GDP.  When policymakers rely on such an antiquated tool, how can they measure, understand, and respond with any precision to what is really taking place in today’s digital economy?  In our discussion, Professor Coyle makes a compelling case for a new measurement that takes into consideration current economic realities.  The practical, real- life examples we discuss will provide insight into the importance of doing so with urgency.

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