Macro Hive Conversations With Bilal Hafeez Ep. 328: Diane Coyle on GDP, Digital Gaps and Invisible AI Economy
22 snips
Oct 2, 2025 
Diane Coyle, Bennett Professor of Public Policy at the University of Cambridge and author of 'The Measure of Progress', dives into the flaws of GDP measurement. She discusses the overlooked digital economy and free services, highlighting how traditional metrics fail to capture productivity in modern sectors. Coyle suggests innovative methods, like time-use surveys and alternative data sources, to enhance economic measurement. She argues for a broader view of progress that includes sustainability and human capital, urging policymakers to focus on actionable metrics.
AI Snips
Chapters
Books
Transcript
Episode notes
GDP Fails To Capture The Modern Economy
- GDP misses large parts of today's economy because digital activity and cross-border supply chains are poorly captured.
- This makes GDP an inadequate guide for business and government decisions in the modern economy.
Free Services Create Invisible Value
- Free digital services like search and email create substantial value that standard GDP omits because no price is paid.
- We currently lack consensus or standards to include such consumer surplus in national accounts.
AI's Economic Impact Is Largely Unmeasured
- We cannot yet measure how much economic value AI is creating because usage and effects are not tracked in official statistics.
- This measurement gap leaves policymakers and firms uncertain about AI's real contribution.
