Top Traders Unplugged

IL40: Why the Economy Feels Broken... Even When It’s Growing ft. Diane Coyle

Aug 6, 2025
Guest
Diane Coyle
Diane Coyle, Co-director of the Bennett Institute for Public Policy and a former UK Treasury advisor, dives into the inadequacies of GDP as a measure of economic progress. She argues that traditional statistics fail to capture the true value created by services and digital labor. The discussion centers on the complexities of modern economic realities, including the rise of automation and the need for innovative metrics that account for time, trust, and sustainability. Coyle advocates for a new framework that reflects the true foundations of growth.
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INSIGHT

GDP's Outdated Foundations

  • GDP was designed in a manufacturing and agricultural economy focused on material production.
  • Its framework struggles to capture today’s economy, dominated by intangibles and services.
INSIGHT

GDP Does Not Add Up Realistically

  • GDP components add up in nominal terms but not after adjusting for inflation.
  • Price indices used to measure "real" terms are conceptual constructs with political and distributional effects.
ANECDOTE

Rolls-Royce Profit from Services

  • Rolls-Royce earns two-thirds of profits through services around their turbines, not just sales.
  • This shift to servitization challenges traditional industry classification and GDP measurement.
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