The growth report
Gerard Lyons, chief economist at Standard Chartered Bank, inadvertently sums up the growth paradox very well in the Times this week. “Economic fundamentals matter” he writes, “and if something appears unsustainable or out of line with reality, then it probably is. At some stage it will need to be corrected, and the longer it takes, the more severe the correction is likely to be.” All very true, which makes it a little sad when he claims that “growth is the key” just a couple of paragraphs later.
On the other side, Rajenda Pachauri questioned GDP on Radio 4 at the weekend. “We have to come up with new metrics where we look at welfare in a much larger context than just GDP, which I think is proving to be an extremely harmful way of measuring economic progress.”