Why did the size of the U.S. economy increase by 3 percent on one day in mid-2013—or Ghana's balloon by 60 percent overnight in 2010? Why did the U.K. financial industry show its fastest expansion ever at the end of 2008—just as the world’s financial system went into meltdown? And why was Greece’s chief statistician charged with treason in 2013 for apparently doing nothing more than trying to accurately report the size of his country’s economy? The answers to all these questions lie in the way we define and measure national economies around the world: Gross Domestic Product. This entertaining and informative book tells the story of GDP, making sense of a statistic that appears constantly in the news, business, and politics, and that seems to rule our lives—but that hardly anyone actually understands.
Diane Coyle traces the history of this artificial, abstract, complex, but exceedingly important statistic from its eighteenth- and nineteenth-century precursors through its invention in the 1940s and its postwar golden age, and then through the Great Crash up to today. The reader learns why this standard measure of the size of a country’s economy was invented, how it has changed over the decades, and what its strengths and weaknesses are. The book explains why even small changes in GDP can decide elections, influence major political decisions, and determine whether countries can keep borrowing or be thrown into recession. The book ends by making the case that GDP was a good measure for the twentieth century but is increasingly inappropriate for a twenty-first-century economy driven by innovation, services, and intangible goods.
Diane Coyle is professor of economics at the University of Manchester. She runs the consultancy Enlightenment Economics, and as well as a regular blog, she is the author of numerous books, including The Economics of Enough and The Soulful Science: What Economists Really Do and Why It Matters (both Princeton).
"GDP is, as Diane Coyle points out in her entertaining and informative GDP: A Brief but Affectionate History, a bodge, an ongoing argument."--John Lanchester, London Review of Books
"[A] little charmer of a book. . . . GDP: A Brief but Affectionate History is just what the title promises. . . . Cowperthwaite himself would nod in agreement over Ms. Coyle's informed discussion of what the GDP misses and how it misfires. . . . Ms. Coyle--a graceful and witty writer, by the way--recounts familiar problems and adds some new ones. . . . [E]xcellent."--James Grant, Wall Street Journal
"Anyone who wants to know how GDP and the SNA have come to play such important roles in economic policy-making will gain from reading Coyle's book. As will anyone who wants to gain more understanding of the concept's strengths and weaknesses."--Nicholas Oulton, Science
"Diane Coyle's new book, GDP: A Brief But Affectionate History, is a timely contribution to discussions of modern economic performance."--Arnold Kling, American
"[E]xcellent."--Adam Creighton, The Australian
"Diane Coyle's book is as good a simple guide as we are likely to see."--Samuel Brittan, Financial Times
"Coyle does good work explicating a topic that few understand, even if it affects each of us daily. A pleasure for facts-and-numbers geeks, though accessibly written and full of meaningful real-world examples."--Kirkus Reviews
"[S]mart and lucid. . . . [S]hort but masterful."--Todd G. Buchholz, Finance & Development
"[G]reat (and well-timed) new book."--Uri Friedman, The Atlantic
Table of Contents:
Note on the Paperback Edition vii
ONE From the Eighteenth Century to the 1930s: War and Depression 7
TWO 1945 to 1975: The Golden Age 43
THREE The Legacy of the 1970s: A Crisis of Capitalism 61
FOUR 1995 to 2005: The New Paradigm 79
FIVE Our Times: The Great Crash 95
SIX The Future: Twenty-first-Century GDP 123
Other Princeton books authored or coauthored by Diane Coyle: