Latest news with #DianeCoyle
Mint
01-06-2025
- Business
- Mint
Kaushik Basu: Redefine prosperity; GDP tunnel-vision could prove costly
In mainstream economics, description is routinely treated as secondary to analysis. Labelling a work as 'purely descriptive' conveys dismissiveness. Yet, as Nobel laureate economist Amartya Sen observed in a seminal 1980 paper, every act of description involves choices. Whether we are describing a historical event, an individual or a country, what we choose to include and what we leave out can be critical. Description shapes perception. And perception, in turn, can profoundly influence behaviour. Describing the state of a country's economy is a complicated task. In the past, scholars wrote lengthy volumes debating whether one country was doing better than another. But over time, globally, a single measure has come to dominate the conversation: gross domestic product, or GDP for short, which represents the value of all goods and services produced within a country in a given year. With some adjustments, it also approximates the population's total income. It is an astonishingly concise metric, often used as shorthand for economic well-being. Also Read: It's time to lay the great Indian GDP controversy to rest As Diane Coyle noted in her 2014 book on the history of GDP, its emergence marked a watershed moment in economic policymaking. Developed by Simon Kuznets in the early 1930s, GDP has brought much-needed rigour to policy debates. Politicians could no longer simply point to tall buildings as evidence of progress (though many still do). Today, assessing a country's economic performance over time means tracking the growth of its GDP. To be sure, there are other ways to assess national well-being, such as the United Nations Human Development Index and the World Bank's shared prosperity indicator. But when it comes to determining whether one economy is outperforming another, GDP (or GDP per capita) remains the default benchmark. While GDP has undoubtedly played a valuable role in modern economics, its limitations are increasingly difficult to ignore. Over time, it has become an end in itself, enabling politicians to use growth figures as a convenient distraction from persistent social and economic fractures. Growing unease with GDP-centric policy thinking was powerfully articulated in UN Secretary-General António Guterres's 2021 report Our Common Agenda, which urged global policymakers to embrace a broader set of progress indicators. Also Read: Statistical dust-up: The great Indian GDP controversy needn't have arisen As an economic indicator, GDP has three key weaknesses. First, by focusing solely on a country's total income, it can create the illusion of widespread prosperity, even when inequality is rising. GDP per capita can rise even as a majority becomes worse off. As Joseph E. Stiglitz put it in his 2010 book Freefall, 'A larger pie does not mean everyone–or even most people–gets a larger slice." But most people may celebrate GDP growth nonetheless—much like they cheer their country's Olympic medal count—without questioning who actually benefits. This concern was highlighted by the Commission on the Measurement of Economic Performance and Social Progress, which was established in 2008 by then-French President Nicolas Sarkozy and included Joseph Stiglitz, Amartya Sen and other prominent economists. Its final report called for incorporating measures like income distribution and inequality into GDP. The second weakness of GDP is that its maximization often rewards activities that undermine democratic governance. Being super-rich, after all, involves more than just owning more cars, mansions, planes and yachts. Extreme wealth, especially in the age of social media and AI, also means having a louder voice and disproportionate influence over how people think. In traditional societies, when a feudal lord entered a village council meeting, ordinary people who may have been arguing and pleading for change just moments earlier would fall silent. That same dynamic is now playing out on a global scale. Also Read: The state of India's economy is not as bright as GDP data may suggest As wealth becomes concentrated in fewer hands, and as a handful of online platforms shape what billions of internet users see and hear, many are discovering that they are losing their voice—the most essential instrument of democracy. Clearly, the time has come to develop new measures of national progress that do not strengthen the forces threatening democracy. As US Supreme Court Justice Louis Brandeis famously warned, 'We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." Lastly, GDP can be inflated at the expense of future generations. We can and do boost GDP growth by engaging in activities that damage the environment and accelerate climate change, leaving our descendants with a scorched earth. Given this, merely acknowledging the urgency of climate action is no longer enough. To ensure a sustainable future, we must reform our most prominent measure of economic welfare so that sustainability is central to how we define prosperity. ©2025/Project Syndicate The author is a professor of economics at Cornell University and a former chief economic adviser to the Government of India.
Arab News
08-04-2025
- Business
- Arab News
What We Are Reading Today: ‘The Measure of Progress' by Diane Coyle
The ways that statisticians and governments measure the economy were developed in the 1940s, when the urgent economic problems were entirely different from those of today. In 'The Measure of Progress,' Diane Coyle argues that the framework underpinning today's economic statistics is so outdated that it functions as a distorting lens, or even a set of blinkers. When policymakers rely on such an antiquated conceptual tool, how can they measure, understand, and respond with any precision to what is happening in today's digital economy?
Reuters
01-04-2025
- Business
- Reuters
Plugging the gaping holes in economic data: podcast
LONDON, April 1 (Reuters Breakingviews) - Follow on Apple, opens new tab or Spotify, opens new tab. Listen on the Reuters app, opens new tab. Read the episode transcript. Listen to the podcast, opens new tab Measuring growth requires reliable information about an economy's output. But the established methods are hopelessly out of date. In this episode of The Big View podcast, economist Diane Coyle discusses ways in which statistics could be improved, and why change is so hard. Follow @peter_tl, opens new tab on X FURTHER READING US tax weaponisation launches messy European fight UK mistakes City liberalisation for a growth plan UK green fund has risky but valid investor carrots Visit the Thomson Reuters Privacy Statement, opens new tab for information on our privacy and data protection practices. You may also visit opens new tab to opt-out of targeted advertising. For more insights like these, click here, opens new tab to try Breakingviews for free. Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.
