Economist Mike Walden: Challenges in Measuring the Economy

Business people, investors, and academics like yourself look forward to the daily release of various measures of the economy.  These data are used to assess the progress of the economy and help a variety of both public and private decision makers make judgements about spending, investing, and hiring.  But are there challenges with these well-watched economic measures?

  1. take as an example – GDP
  2. value of everything produced in the economy – key gauge of growth in the               economy
  3. but issues
  4. only transactions using money – work of housewives and househusbands not        included; how include things not measured by money
  5. doesn’t account for negatives from growth – like pollution
  6. how to count government services
  7. also, can be deceptive unless put on a per person basis – recent slowdown