Chris Giles and the "NIESR chart"
Today we published our latest monthly GDP estimates, and alongside that our chart showing the path of recession and recovery in this and previous downturns. Chris Giles has responded with a critique, pointing out that if you look at employment rather than output the picture is very different. He's quite right; but, as he says, many others (including me) have made this point before. Having made this simple point, though, he then becomes somewhat hyperbolic, arguing that:
"NIESR is doing the country a huge disservice in continuing to publish the NIESR chart alone"
Well, as Chris and I have discussed before, there is a real puzzle about low measured productivity in the UK, but NIESR does manage to average more than a chart a month. Our quarterly forecast (£) includes, as you would expect, dozens of charts, including (A9) precisely the one his article cheekily calls the "FT chart." We've been producing and publishing that one for some time, as I imagine have others (the data is freely available). Chris could have reproduced our version in the FT any time he wanted; he had only to ask.
And of course I highlight lots of different charts on my blog, depending on the topic. See here, for example, where I do indeed argue that a certain measure of macroeconomically driven unemployment (the "unemployment gap") is in some respects more relevant for the UK economic policy debate. More broadly, no sensible economist, here or elsewhere, would make judgements about the overall state of the economy on the basis of one chart. I know Chris doesn't think we do, so I'm slightly at a loss as to his point here.
We do publish a revised version of the "NIESR chart" monthly, for two simple reasons. The first is rather prosaic: it is actually a NIESR chart, constructed using our own monthly GDP estimates, so it's "ours" in a way that the other charts in our publications, which mostly use ONS data, are not. Unlike other charts, no-one else can produce it or publish it, because they don't have the data. Second, for better or worse, GDP is generally regarded, not least by Chris's journalists colleagues at the FT and elsewhere, as the single best indicator of the overall level of economic activity. As the ONS puts it:
"Gross Domestic Product (GDP) provides a measure of the total economic activity in the UK."
Chris points out correctly that the National Bureau of Economic Research (NBER) uses other data, including employment, to date recessions; but the NBER still says explicitly that the central indicator is GDP (and the usually similar GNI). I have no doubt that when the NBER meet they look at the GDP chart first, and then dozens of other charts. Just as we do when making forecasts.
What really seems to bother Chris is not so much that we produce the NIESR chart, but that it's too popular for his taste; his colleagues in the press and other commentators like it too much. On twitter, he issued a cri de coeur:
"Britain must stop its focus on one chart"
In Chris's view, then, the national conversation revolves around NIESR's monthly GDP estimates. I'd love to believe this, but I'm sceptical that the nation is actually huddled around its computers once a month, waiting for the latest edition of the "NIESR chart" to be released. But I'm prepared to do my bit to counter the scourge of GDP-fixation, if Chris is. He's the Economics Editor of the most prestigious financial daily in the world. If he wants to offer me some column space, I will be happy to use a different - but relevant and illuminating - chart every time.