Why Our Economic Numbers Distort Reality I'm not an economist but have always wondered why a set of numbers like this should have a political impact. Read the full piece @ http://www.foreignaffairs.com/articles/140749/zachary-karabell/misleading-indicators
There are clear aspects where the stats fail. We know, for example, GDP isn't a good measure of living standards. But that is a 'so what?' moment. We're free to utilise and ignore data. I ignore, for example, employment data. It excludes issues of underemployment and underpayment. You merely need to check definitions. Easily done!
I read that in economy you also have (hidden) latent variables, things you could only deduce from "visible" data, or that observed data are in fact due to latent ones.
