Measure what you need to manage

Improved measurement for macroeconomic policy: Three problems and three solutions

An important constraint in difficult times is the lack of trusted and timely data. We face three problems. Many elements of information on the Indian economy are faulty. The data comes in with a lag. Year-on-year growth rates do not tell us what is going on right now. To this there are three solutions. We should emphasise data where the methods for measurement are sound. Seasonal adjustment makes it possible to see what is going on, closer to the present. Leading indicators give us an edge, of about one to two quarters, in peering into business cycle conditions. 

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