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Fickle Formulas. The Political Economy of Macroeconomic Measurement

Project description

Untangling the politics of economic measurement

As the backbone of economic governance, macroeconomic indicators wield immense influence, guiding policy decisions and shaping our future. Yet, the seemingly objective nature of these metrics conceals a troubling truth: their definitions and measurements are far from clear-cut. This ambiguity produces winners and losers, entails environmental costs, and begs the question: why do we rely on these flawed measurements? With this in mind, the ERC-funded FICKLEFORMS project will unravel the social, political, and economic factors that drive the formulas behind these indicators. It will examine the evolution of key indicators across central OECD countries and investigate statistical harmonisation efforts on a global scale. FICKLEFORMS will thereby help us to navigate the biases built into traditional economic metrics.

Objective

Macroeconomic indicators are integral to economic governance. Measurements of growth, unemployment, inflation and public deficits inform policy, for example through growth targets and the inflation-indexation of wages. These indicators tell us “how economies are doing” and citizens often punish politicians who fail to deliver on them.
Their air of objectivity notwithstanding, it is far from self-evident how these indicators should be defined and measured. Our choices here have deeply distributional consequences, producing winners and losers, and will shape our future, for example when GDP figures hide the cost of environmental degradation. So why do we measure our economies the way we do?
Criticisms of particular measures are hardly new but their real-world effect has been limited. The project therefore asks: which social, political and economic factors shape the formulas used to calculate macroeconomic indicators? Extant research offers detailed histories of statistics, mostly in single countries. But we lack theoretical and empirical tools to describe and explain differences in measurement formulas between countries and over time.
FICKLEFORMS will provide such understanding through five sub-projects. The first systematically compares the evolution of four indicators in four central OECD countries: the United Kingdom, the United States, France and Germany. The second analyses the timing and content of statistical harmonization efforts through the United Nations, the IMF and the World Bank. The third constructs a new database of “measures of measures” to quantitatively test hypotheses emerging from the previous sub-projects. The final two sub-projects reach beyond the OECD and study the politics of macroeconomic measurement in China, India, Brazil and South Africa.
This project will promote public debate over meaningful measures, allow policy-makers to reflect on current practices, and sensitize academics who use macroeconomic data about their political roots.

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Topic(s)

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Funding Scheme

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ERC-STG - Starting Grant

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Call for proposal

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(opens in new window) ERC-2014-STG

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Host institution

UNIVERSITEIT VAN AMSTERDAM
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 1 499 875,00
Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 1 499 875,00

Beneficiaries (1)

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