Losing Affection for GDP

By Arnold Kling

"The more research I have done on economic statistics, appreciating the practical challenges, the less certain I am that we know anything solid about today’s economy."

– Diane Coyle, The Measure of Progress: Counting What Really Matters, (page 29)

It would be nice to have definitive measures of economic progress. We would like to know whether progress is faster in one country than in another. We would like to know whether progress was faster in one period of time than in another. We would like to know how different policies and institutional arrangements affect progress.

Diane Coyle has spent decades doing research on the problem of measuring progress. Her experience and her thought process make her work, The Measure of Progress: Counting What Really Matters, a valuable treatise.

The most commonly used indicator is Gross Domestic Product, reported either as a total amount or on a per capita basis. But GDP data are often quoted in the press or used by economists without much consideration of the problems in constructing the estimates.

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