It is faintly surprising that one of the liveliest areas of economics these days is the question of measurement, and what relation published statistics bear to what is happening in the economy. Statistics do not usually inspire excitement.
This attention reflects the convergence of two strands of scepticism about the existing statistics, and in particular gross domestic product. One is the “productivity puzzle” and to what extent the mis-measurement of digital phenomena helps explain the slow rate of productivity growth. The other is the longstanding critique of GDP as a meaningful measure of progress, for reasons of environmental sustainability or other contributors to society’s wellbeing.
The two converge on the distinction between the aggregate amount of marketed economic activity and total economic welfare. The conventional statement about GDP is that it is only meant to count the former, not the latter. GDP does not capture environmental factors or consider income distribution. But as long as that gap has been roughly constant, GDP growth has been a good enough measure of improvement in economic welfare.