Studying macroeconomic indicators as powerful ideas

ABSTRACT

Macroeconomic indicators – especially inflation, gross domestic product growth, public deficits and unemployment – stand central in economic governance. Policy-makers use them to assess their economies’ health. Citizens evaluate politicians’ performance using them as yardsticks. But these indicators defy simple definition, and the formulae underlying them have varied across countries and over time. Particular choices have fundamental distributive consequences. This research agenda outlines how we might study macroeconomic indicators as powerful ideas and ask: why do we measure the economy the way we do? It illustrates the myriad ways in which macroeconomic indicators are embedded in contemporary social and political life, and it outlines how we can uncover both what power rests in these indicators and who has power over them. After path-breaking scholarship has demonstrated how consequential these indicators are, it is imperative to understand better which forces determine our choice for one indicator formula over its alternatives.

KEY WORDS:

• GDP
• ideas
• macroeconomic indicators
• political economy
• power

ACKNOWLEDGEMENTS

I am thankful for suggestions and advice to the guest editors of this collection (Daniel Beland, Martin Carstensen and Leonard Seabrooke), Juliet Johnson, the participants at the ENLIGHTEN workshop in Snekkersten, Denmark, my colleagues at the Amsterdam Institute for Social Science Research and the Centre for European Studies at Harvard University. I am also grateful to David Takeo Hymans, for skilful text editing. This research is supported by the Dutch Organization for Scientific Research (Vidi grant 452-13-002) and by the European Research Council (Starting Grant 637683).

Notes

1 The word ‘formula’ is a shorthand for the procedure to calculate a specific macroeconomic indicator, for example the consumer price index.

2 Stiglitz et al. (2010: 52) report much higher figures for the recent period, ranging from 30 per cent of GDP for the US to 40 per cent for Finland. These variations highlight how differences in the marketization of economic activities, widely conceived, distort cross-country comparisons of GDP levels and economic performance.

3 I owe this particular idea to Wes Widmaier.

Additional information

Notes on contributors

Daniel Mügge

Biographical note

Daniel Mügge is an associate professor at the Political Science Department at the University of Amsterdam.