Things are tough now, but the wonks could emerge from the pandemic with a better understanding of how the economy really works
that overheats in hot weather, or an insurance policy that fails to pay out after a natural disaster: some things do not work as expected, just when you need them most. So it is with official statistics in the pandemic. As they try to gauge the depth of the downturn, policymakers and investors are keener to pore over the latestMany economists expect the initial estimate of America’s output growth in the first quarter of 2020, published on April 29th, to be revised downwards eventually.
Statisticians are well aware of the uncertainty. Britain’s Office for National Statistics has mulled introducing confidence intervals for its estimates—but no one knows quite how wide the bands should be. France’s statistical office says that its first-quarter estimate ofduring downturns tend to be revised downwards significantly .
During the pandemic, these problems have been turned up a notch. Many businesses have temporarily stopped trading and thus responding to surveys. The sectors of the economy most affected by lockdowns, such as education, leisure and hospitality, often have the longest lags in reporting, making early estimates especially unreliable. In some cases, collecting data is impossible.
In response, statisticians are making quick fixes. In America the output of public-education services is usually estimated using teachers’ pay. But statisticians have weakened the link between pay and measured activity to reflect the fact that, though teachers continue to receive salaries, students have missed hours of instruction. Others are using conversations with companies, statistical techniques and guesswork to fill in gaps.
Many are also looking to make more drastic changes by incorporating “real-time” data. Timely figures ranging from restaurant reservations to prices on Amazon are already widely used by private-sector economists. Institutional inertia and tight budgets had led many statistics offices to shun them; now they have little choice but to experiment.
France Dernières Nouvelles, France Actualités
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