The 2013 ISI/IEA Strategic Forum on “The Measurement of the Cost of Long and Deep Recessions: Beyond GDP”

Rome, Italy, July 1st, 2013

GDP was developed in the aftermath of the Great Depression to guide policymakers in responding to the evolving economic situation. It was originally not intended to be a measure of well-being, and Kuznets warned against such uses. Nonetheless, it has increasingly become so used. There is increasing concern, though, that our statistical framework has not provided (a) a timely accounting of what is happening in the market economy (with substantial revisions occurring repeatedly in the months after the preliminary data, sometimes long after, changing perceptions of what is happening to the economy; (b) an accurate assessment of the impact of the downturn on broader aspects of societal well-being, including distributional impacts; or (c) an assessment of long term impacts – the extent to which, for instance, human capital may be eroding.
Moreover, some scholars have underlined that the current recession/stagnation is quite different from the previous ones and could produce a “economic climate change”, with long-term effects on people’s behaviour. For example, the length of the recession in some European countries, as well as the increase of inequalities in income and wealth, could affect the quality of human and social capital, reducing the future fundamentals of economic and social systems. Finally, some authors have stressed the role that new technologies could have in reducing the demand for labour, i.e. increasing the probability of a jobless recovery.
All these elements could introduce relevant nonlinearities in the way in which the economy works, not necessarily captured by existing economic models and measurement tools. The Forum will use the framework of the International Commission on the Measurement of Economic Performance and Social Progress (CMEPSP) to reassess our statistical and econometric systems’ ability to provide guidance on the impact of the economic downturn and possible recovery.

Here you can find the program.