I am an economist but I have been struggling with the number of estimates that are generated these days. Say we talk about a developed economy which unlike the Indian economy publishes very granular economic data. There would be thousands of variables related to GDP, Inflation, Industry, Credit etc. that are published. While this is certainly a good and useful thing to do what troubles me most is the series of estimates that get generated.
In terms of regularity of reports you have weekly, monthly, quarterly, half-yearly and annual reports. Then in terms of the preciseness of reporting you have the quick estimates, then you have the advance estimates, and then you have a set of revised estimates. Top all this by the number of agencies that report these estimates – the central bank, the treasury, the statistical agency, the chambers of commerce, the commercial and investment banks, the budgetary bodies, the independent/ autonomous bodies that evaluate economic and public finance figures, the supranational bodies like the IMF, OECD, and World Bank and last but not the least the think-tanks. How many estimates does this all make? And this does not include forecasts. It also does not include the revisions in series, and revisions in base numbers that happens every few years. It also does not include the estimates of so many other economies in this coupled world that can have an impact on the economy under discussion.
The problem is by the time one analyses one set of estimates, a new set of estimates arises. Each economist can cite his set of estimates and prove another economist incorrect and defend his/her own turf. Well I have heard of the rationale for publishing the estimates at as short an interval as possible – you are warned of any lurking dangers at the right time. However, I think this is taking it a bit too far. We are facing a surfeit.
This is where experience comes in -- the ability to separate the wheat from the chaff.
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