Economic Statistics in the 21st Century

One of the more interesting aspects of my work over the past year or so has been my engagement with the Office for National Statistics (ONS).

What started as a discussion about data on trade in services (more on this in a future post!) has evolved into a broader relationship that has allowed us to exchange views on a variety of macroeconomic topics that are relevant to financial and related professional services.

Last week I got a wonderful distillation of these topics, and many other themes, when I travelled to Newport for the ONS’s first annual economic statistics conference. Over two days, senior ONS figures and prominent guest speakers gave presentations and led discussions on topical issues in the world of economic statistics. One panel, for example, discussed how the standard national-accounts framework should be revised to adapt to the evolving 21st-century economy, in which the traditional boundaries between consumers and producers are being blurred. For example, how should we account for the value of someone sitting at home and contributing to a Wikipedia page? Consumers and businesses now take digital platforms for granted—Uber and Airbnb are the most-often cited examples—but their value is still not always captured in economic statistics.

Some of the material presented was very specific—and very valuable for it. I greatly enjoyed the presentation given by Eurostat’s Director of National Accounts, Prices and Key Indicators, Dr Silke Stapel-Weber, on crossborder balance-of-payments asymmetries. But this balance between the specific and technical on the one hand and the broad and conceptual on the other was what made the conference unique.

My previous post talked about the need for economics to embrace quantitative models, which can establish frameworks and add rigour to empirical analysis—but also to engage in more qualitative, cross-disciplinary work so that as a discipline, it can be as relevant as possible in the ‘real world’. Looked at in the aggregate, the ONS conference did a wonderful job of explaining the technicalities of some of the current challenges around collection and dissemination of economic statistics—but also in making it clear why these issues matter to non-specialists. Perhaps the best example was the idea that GDP is a measure of economic activity, not well-being. Because there is generally an overlap between increased economic activity and increased well-being (all else being equal!) the two concepts often get conflated—especially, but not exclusively, in the mainstream media. The OECD has done great work addressing this point by creating well-being framework that presents this overlap—as well as the overlap between individual and societal well-being—graphically:

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And the ONS has been equally enterprising by creating a wide-ranging, interactive well-being dashboard.