How to best capture, assess or measure the overall economic activities of a modern nation state is an extremely challenging and complex task. The way, we assess and estimate economic data needs an update, as the existing tools aren’t able to capture the full picture,creating gaps. Also, what specific set of economic data is more relevant and serves as a better assessment tool to help assess the health of the overall economy needs to be looked at.
The policymakers as well as the governments need better quality and more relevant economic data that can be used as a reliable input to create specific policies, or evaluate a policy decision or reform. The existing leading economic data that are commonly used to make short term projections about the health of the economy, are quite volatile and also fails to accurately paint a high resolution picture of the overall economy,and is therefore subject to a wide range of different interpretations. And unlike a scientific data, economic data are created mostly as an estimation so it can not be relied upon as a fact.
We live in a rapidly changing society and the economy is changing with the world ,and in the process becoming increasingly complex. So relying on the old tools to fully measure the overall economic activities, in order to assess the well-being of the economy, without having the capacity to rigorously interrogate the numbers, can only be described as an incomplete exercise with an incomplete process.
Getting a real time assessment of a nation’s economy is an extremely difficult challenge today, and the overhaul process could help us learn, how to get better at it. A road safety indicator could be derived from the numbers of accidents, both fatal and non fatals. So it’s not really a complicated exercise, but collecting a different set and range of data from various parts of the economy, and then processing it using a defined set of economic indicators as a tool to measure all the economic activities and the general well-being of an economy is quite a complicated process, and prone to errors. Input decides the output, and whatever be the input, we will have some output return loss.
So no system or engine created by human beings is 100% efficient, and therefore, even the best set of economic data will most likely fail to fully and comprehensively capture the true picture of an economy. And unlike a practising clinical physician, who is able to accurately assess the health of a patient real time by measuring the key life indicators created using highly advanced medical diagnostic tools, an economist has to rely on a set of estimated data that are extremely volatile and prone to errors as guidance, to navigate their way through, in order to get a pulse of the economy.
The technological advancement which has transformed the modern society is still somewhat absent in the field of economics, and this may be down to the fact that economy is not an exact hard science. Relevant government agencies responsible for collecting, creating and publishing statistical data will have to up their game by looking at overhauling their existing process and systems, in order to produce high quality and relevant data that reflects the changing modern economy. Also part of the field of economics and economic studies focused on creating standard models and methodologies to assess and measure the overall economic activities of an underlying economy needs an overhaul.
Extremely thought provoking! Yes there is an urgent need to get some scientific tools of data gathering into the realm of Economics. As in any closed loop feedback electronic system, the actuator. Is only as much reliable as the sensor!