How to measure the economy's health ...
The measurement of an economy's performance and health has always been a task surrounded by much diasagreement among economists. Some still tribute the old GDP measure while others believe in the fact that you need to go deeper into the numbers and charts. All measures are not equally suited to answer how our economy is fairing but then again, who am I to say that one measure is better than the other. The truth probably is that the mixture of many angles in terms of charts and measures will give the most appropriate picture.
Michael Mandel's blog endorsed by Businessweek tries to answer the question pulling out the somewhat odd measure of factor productivity growth. According to Mr. Mandel this is the best way to map out whether your economy is doing well. The charts on Mandel's blog show the development over the past 40 years and displays interestingly that France has done better than the UK. The orginal source is an article from the BIS (BankofInternationalSettlements) which was first blogged by the excellent New Economist and this article - going into my blogroll swiftly!
There can be no doubt that productivity is a crucial measure in the attempt to differentiate economies and also to differentiate the holistic measure of GDP. In traditional provocative style ;) Mr. Mandel sets out to nominate winners and losers on the basis of this research. USA is the big winner and the rest of OECD helplessly lack behind - I still wonder though, whether other charts with a smaller time span will show a different picture and whether other measures will yield differentiated resutls. After all, statistics are a qualititative and essentially subjective science; right ?