The current economic mess has many alleged causes, from greedy bankers and over-generous Chinese lenders, to financially illiterate home buyers and regulators asleep at the wheel. Yet the crisis also revealed, and was in part due to, the limitations of the economic data we have relied on since the Great Depression. Celebrating ever-rising Gross Domestic Product (and for that matter rising corporate profits and share prices) blinded us to the increasingly serious risks we were taking.

We have been here before. One of the least heralded, but most important, lessons from the Great Depression was the need for better data about the economy. Catastrophically bad decisions were taken by policymakers because the economy had essentially been “driving blind.” This led economists on both sides of the Atlantic to do Nobel Prize-winning work creating the first comprehensive measures of national income....

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