Economic Performance

Abstract

The measurement of economic performance is notoriously difficult and fraught with controversy. The comparison of the economic performance of two or more countries or trading blocs is even more problematical. When it is eventually agreed what to measure and with what units, there may still be disagreement about the relative merits of various aspects of performance. An analogy of the problem may be seen in the task of a motoring correspondent who has to draw up a comparison of a mini and a high performance sports car. You can measure, fairly objectively, top speed, acceleration, petrol consumption, luggage room, seats and maintenance costs, but many of these are dependent upon the operating context — urban, rural or motorway. A traffic jam on the M25 reduces them to temporary equality in most respects except the comfort of the seats and the quality of the ‘in car entertainment’. Similarly, two or more economies can be compared objectively but only up to a point. The context of the comparison and the base from which it is made then becomes of paramount importance.