News brief - November 2009

Showing progress; Economy; Hard talk

Showing progress
Economy
Hard talk

 

Showing progress

Leading economists and international policymakers joined together at the OECD's Third World Forum on Statistics, Knowledge and Policy in October to sound the call for a new standard in measuring progress.

"What we measure affects what we do, and we have been measuring the wrong thing", said Joseph Stiglitz in a speech at the forum in Busan, Korea. The Nobel Prize-winning economist stressed the need for new progress indicators to replace GDP and GNP, which measure only market activity, rather than the well-being of people.

OECD Secretary-General Angel Gurría echoed the sentiment, proclaiming that "economic resources are not the only things that matter". He insisted that "to capture well-being, we have to measure the expectations and level of satisfaction of individuals, how they spend their time, their paid and unpaid work, their capabilities, the relations they have with other people, their political voice and their participation in public life".

Beyond discussing subjective progress metrics, participants also focused on measuring sustainability and "green growth". Stiglitz suggested computing a "Green GNP" by making adjustments for the depletion of natural resources used to produce economic growth.

Lord Richard Layard, from the London School of Economics Centre for Economic Performance, suggested that only drastic changes will make a difference. "We can only break away from the GDP stranglehold by doing something different," he said. "We should value goods as the people value them, not as we outsiders value them."

Economy

OECD leading indicators continued to rise for the OECD area in September to 3.4 points higher than a year ago, pointing towards recovery and possible expansion for some countries.

The leading indicators for Italy increased by 1.3 points in September, 10.8 points higher than a year ago. France, the UK and China also showed positive signs with leading indicators at least 7.0 points higher than the same month in 2008. US leading indicators increased by 1.4 points in September from August and from a year ago, while the indicators for Japan increased by 1.3 points in September, but were 0.7 point lower than a year ago. See www.oecd.org/statistics.

Unemployment in the OECD area held steady at 8.6% from August to September, up from 6.3% in September 2008, but new data from America shows a jobs recovery may yet be in the distance. US unemployment rose 0.4 points from the previous month in October to 10.2%, marking the first time unemployment has surpassed 10% in the US since 1983. In the euro area, the unemployment rate was 9.7%, 0.1 percentage point higher than in August and 2.0 percentage points higher than September 2008. In Japan unemployment dipped to 5.3% in September from 5.5% in August, but was still 1.3 percentage points higher than in September 2008.

Annual inflation fell -0.3 % for the OECD area in September 2009, paced by a -13.9% year-on-year fall in consumer energy prices and a -0.4% dip in food prices from September 2008. The US Consumer Price Index (CPI) dropped -1.3% in September from the same period in 2008, compared to a -1.5% CPI drop in August. Japan's consumer prices fell for a third consecutive month, down -2.2% from the comparable period in 2008, while in the euro area inflation was down -0.3% in September compared with last year.

After the continued drop in quarterly merchandise trade volumes of the G7 countries during the last quarter 2008 and first quarter 2009, the trend reversed with more stable growth volumes in the second quarter 2009. Quarter-on-quarter, the growth of G7 exports stabilized at 0.8% while imports declined by -2.5% in the second quarter of 2009. Year-on-year, trade volume growth levelled off at -23.3% for exports and -19.0% for imports.

Hard talk

Ireland's Finance Minister Brian Lenihan listened to OECD Secretary-General Angel Gurría at the launch of the OECD's Economic Survey of Ireland 2009 (www.oecd.org/ireland) in Dublin in early November. The secretary-general delivered some tough messages for the country-one of the OECD members hardest hit by the global economic crisis.

Even with the unemployment rate forecast to hit 14%, the Irish government should tighten up on unemployment benefits as wages are falling, and ratchet up its active labour market programmes. The government should also cut spending on public services, broaden taxation and tighten up on regulations governing the financial sector.

© OECD Observer, No. 275, November 2009




Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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