Economic activity, or what is called casually ‘growth’, is hard to measure, so when the question of whether growth is occurring, plenty of scope exists for differences of opinion. Without getting too technical, what we want to measure is either the total production, incomes, or spending within the economy. If everything was tied to some central calculator, it would be easy to know what is happening in real time. That would be really cool. But, we humans haven’t been that clever. Instead, we try to get an idea of what’s going on by taking surveys of firms, government, and households, to compile our data. Adding the pieces is simpler when we have common units, such as how much money is involved. That’s fine for incomes or spending. For production and services, we’re stuck trying to measure physical things that are not similar: tons of steel girders, bushels of potatoes, kilos of fresh fish, number of people given advice, patients treated in hospitals, etc. That gives an idea of the computational issues. When the bodies surveyed don’t reply or reply late, the compilers have to adjust for the gaps. So, the best of intent is often subject to the failings of people involved.
The difficulty of measuring correctly and consistently is also there across all areas of the economy, but tends to be of a different order with say prices, external trade, monetary developments, or government financial operations.
Earlier this week, the Governor of the Bank of Jamaica spoke about how the economy had shown “unprecedented resilience” to inflationary shocks, and touched on how the economy had been growing and would grow in coming months. Not surprising to me, at least, someone took issue with that. The fact that it was the chairman of the newly formed Economic Advisory Council of the Jamaica Labour Party–the official opposition party–made this difference of view more interesting. That no academic economists sought to debate the matter says volumes. The official government spokesmen on economic policy are more likely to put data and developments in a positive light, so we need someone to either put a different view on the data and developments or to corroborate the official view. That the academics appear to do neither makes me wonder what role they think they should play, other than training another generation of thinkers and doers.
Countries like Jamaica are full of partisans and many views can only be understood through the optics of partisanship. But, we need to hear those diverse voices and we can try to filter the biases.
The official opposition and its support agencies cannot spend their time effectively being a cheerleader for government. Instead, they oppose, at the least by questioning what government says and does. That said, it’s peculiar that one newspaper would think that it should tell an opposition agent to be careful in disagreeing with the spin the government has given to economic news. The media themselves should be seeking to assess what the government is saying, questioning the speed with which opposing voices are raised. This is a democracy, after all.
Jamaica is in a low growth environment for decades, and has been for decades, according to official data. Saying that it’s grown by about one percent in recent quarters, is as good as saying nothing has changed, if we look at the statistical noise surrounding that small rate of change. So, disputing the contention is no really big thing–unless one only wants to hear that things are better, which is as bad as only hearing that things are worse.
If we just go with our eyes and ears, we can come up with a story that fits the notion that Jamaica has been growing recently (e.g., construction activity), or remaining stagnant (e.g., little change in unemployment), or going into decline (e.g., drought has meant negative disruptions across a range of economic activities, and people who are having a harder financial time now than a year ago, not least because wages have been held unchanged or considerably lower than many prices, especially the cost of utilities).
There is rarely a single truth where economic data are concerned. Asking that we all hold onto the single message put out by the government does us all a disservice.