Hello, my name is David Ronserman and this is Talking Politics. Today we're going to talk about the politics of economics.

And one question in particular, how can we know how politicians are doing? How can we know how countries are doing?

If we don't know any more how to measure what the economy is doing.

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It's a great pleasure to welcome Diane Coil to this podcast for the first time and I'm sure not the last time.

Diane is the new Professor of Public Policy here in Cambridge. She is an economist among many other things.

She's been working recently, particularly on this question which might sound a bit dry but it really isn't the question of how we actually measure what happens in an economy and how do we know whether we're picking up the things that we need to know.

We're going to talk about that. We're going to get to some wider questions like unemployment, the dollar.

We're going to start with GDP. We've also got Alan Thompson with us. He knows about the International Political Economy, Chris Bickerton. He knows about European politics.

These things will connect, I hope.

But let's start with that GDP question. Diane, I know you've written a lot about this in the past.

It is the basic measure of economic activity. It has been for a long time. Governments stand or fall by the growth figures.

The definition of a recession is in GDP terms. It has to be two successive quarters of negative growth.

We depend on GDP basically to know how things are going and it is a long standing but pretty out of date measure.

So just tell us a bit about what it does measure and what it doesn't measure.

It's less than a century old actually, dates from out of the Second World War.

And the very concept of the economy is a separate domain from life, dates from the early 20th century.

So although it feels like part of our everyday mental furniture, it's actually a relatively new way of thinking about economic progress.

And of course we get obsessed about the quarterly figures. Is it 0.1? Is it 0.3? But it isn't a real thing.

It's an analytical construct. So it's not like you're trying to take a temperature or measure the distance of something.

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