Economics serving society

Measurement in Economics, Nowcasting – Beyond GDP Chair

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Presentation

The “Measuring the Economy, Nowcasting - Beyond GDP” Research Chair is the result of an exceptional and original partnership due to the diversity and complementarity of the players who are committed to sharing and supporting their ambitions in these research areas.

It brings together the French National Institute of Statistics and Economic Studies (INSEE), whose work in these fields is authoritative, a start-up offering macroeconomic forecasts based on Big Data and Artificial Intelligence (QuantCube Technology), an international asset management company (CANDRIAM) and a major French bank (Société Générale), that together intend to develop their methods of economic measurement and analysis, and a research and teaching center (Paris School of Economics) that has always been committed to a quantified and statistical approach in economics. The chair will be able to develop scientific collaborations and mobilize diverse expertise. For example, it will collaborate with the OECD in the framework of its WISE (Well-being, Inclusion, Sustainability and Equal Opportunity) program.

Nowcasting – Relevance, timeliness and speed are three major objectives in the production of economic statistics: to provide indicators that shed the best possible light on the current state and prospects of the economy, and to do so in the shortest possible time, without sacrificing the quality of the information. This dual expectation was further reinforced by the health crisis of 2020. It has increased the demand for speed in the production of the usual indicators. This axis is led by Catherine Doz, PSE and University Paris 1 Panthéon-Sorbonne Professor.

Beyond GDP - Reflections on what the “next world” could or should be reinforce questions about the limits of these indicators, mainly those produced by the national accounts. In the face of these questions, it is necessary to communicate better on what their contributions are, to work on further improving them, and to continue the search for complementary indicators, for which the same question of time will arise. This axis is led by Marc Fleurbaey, PSE Chaired Professor and CNRS Senior Researcher.

Nowcasting & Beyond GDP - The link between the two approaches of the chair lies in their joint contribution to the effort to increase the relevance of available statistics and data for decision-makers and the public, whether in the temporal dimension (speed, visibility) or in the field of measured objects (economic activity, well-being, sustainable development). In short, it is a question of producing advanced indicators on the one hand, and of making progress in the construction of relevant indicators for society on the other.

Activities

  • Organization of scientific or general public events Research seminars, international conferences and thematic workshops will punctuate the scientific life of the chair, bringing together an academic audience and professionals with expertise in these issues. Each year, a major conference bringing together researchers and partners, but also a wider public, will report on the latest work (including a round-table format conference).
  • Invitations of researchers The chair brings together researchers from all over the world, for short or long periods, in order to enrich the work carried out and initiate new collaborations. These guests participate in the events and/or teachings of the chair.
  • Funding of doctoral and postdoctoral grants On topics specific to the chair and defined by the partners, doctoral and post-doctoral fellowships are regularly offered through an international call for applications. After review by an appropriate jury, the selected candidates will join the doctoral program or the PSE scientific community.
  • Implementation of Executive Education sessions Based on the most recent developments in research, the chair can contribute to the strategic thinking of professionals and help them respond to the challenges they face through short, tailor-made training sessions, either face-to-face or through distance learning. For example, through a “mini-course” on dynamic factor models or on the equivalent income approach.
  • Exchanges with partners The chair is a place for reflection and exchange between the partners. A transversal seminar is organized, bringing together all the researchers involved and the employees of the partners interested in the work in progress. Regular collaborations can be set up between the different people involved, on specific subjects or longer term projects.

- Press release of the launch of the “Measuring the Economy, Nowcasting - Beyond GDP” Research Chair (PDF - 2.03 MB)

Objectives

The Measurement in Economics, Nowcasting – Beyond GDP Research Chair is created at Paris School of Economics. It aims to contribute to the progress of economic statistics methods, by promoting the mobilization of new sources and the development of very short-term forecasting tools (Nowcasting), and by continuing the reflections initiated from the Stiglitz Commission on a deepening of the statistical measurement of economic performance and well-being (Beyond GDP). On these two components, the objective of the chair is to better meet the expectations of private and public decision-makers, and more broadly of the social demand on these subjects.

A scientific program in 2 axis

Improve measurement and forecasting in the very short term (nowcasting)
Nowcasting is the term used to describe very short-term forecasting (also known as “nowcasting”), i.e., the forecast that can be made of a quantity (e.g., GDP) before its first official publication. However, the techniques mobilized can also be used for short-term forecasting, for example the one-year forecast. These very short-term forecasts are useful for public decision-makers in charge of national or international economic policy. They are also useful for private investors whose choices may be partly guided by this type of forecast. Indeed, they provide an estimate of the current values of the macroeconomic variables of interest at a time when they are not yet known, due to the publication deadlines to which these variables are subject.

Measuring « around and beyond GDP »
Over the past decade, questions about the “mismeasurement” of an increasingly polymorphic and dematerialized growth have been added to the more traditional criticisms of the “beyond GDP” literature. The crisis has offered new variants of these different questions, concerning, for example, the question of the relative value of public services or other so-called “essential” activities, or that of the measurement of prices and living standards in a context of brutal and forced deformation of consumption structures.

Towards faster measurement of indicators around and beyond GDP?
Eventually, and if the data are suitable, it is conceivable that synergies could be created between the two parts of the chair. This perspective of work, which would be nourished by the two parts of the chair, is today at the stage of reflection, and its feasibility depends in particular on the availability of suitable data. However, it would constitute an important research and application opportunity, which could be put on the chair’s agenda and lead to collaboration between the two axes. For example, the fact that social and welfare data often attract less media and political attention is often lamented by analysts, and attributed to their too episodic availability, as well as the long delays that characterize their publication. Increasing the frequency and speed of publication of indicators of well-being, living conditions, inequality and poverty can come not only from a better mastery of the concepts and measurement methods that can be used, but also from the mobilization of original data and adapted statistical processing.

Chair’s holders

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Catherine Doz - Professor at PSE and at université Paris 1 Panthéon-Sorbonne

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Marc Fleurbaey - Professor at PSE and Director of Research CNRS

Steering Committee

Composed of the co-directors of the chair, one or two representatives of each Partner, and a representative of the PSE Direction, the Steering Committee defines the strategic orientations of the chair, the means necessary to implement them, and their implementation in terms of recruitment or research themes. It meets at least three times a year.

PSE Partners

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The mission of Insee is to collect, analyze and disseminate information on the French economy and society throughout its territory. It conducts its work in complete professional independence. With a nationwide presence through its establishments and regional offices, INSEE conducts population censuses in partnership with municipalities and draws up an economic and social overview of France each year through some fifty surveys. In the macroeconomic field, INSEE is responsible for producing annual and quarterly national accounts in accordance with international standards. It prepares and disseminates cyclical information and periodically summarizes it. INSEE conducts studies aimed at shedding light on trends in the French economy and its prospects, and promotes the development of methods and statistics in the fields within its competence.

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QuantCube Technology uses artificial intelligence and big data analytics to deliver real-time macro-economic insights. The firm operates one of the largest alternative data lakes in the world, processing more than 14 billion data end points. Sources encompass news, social media, satellite data, professional networks and consumer reviews, as well as international trade, shipping, real-estate, hospitality and telecoms data. QuantCube’s macro nowcast indices, on variables including economic growth, inflation, employment and international trade, correlate highly with official data and significantly beat the consensus. Financial institutions using QuantCube data benefit from real-time insight, often ahead of official numbers, which they can use to inform their investment strategies. Headquartered in Paris, QuantCube employs a diverse international team of data scientists with expertise in multilingual NLP, deep learning and machine learning techniques. The company’s shareholders include Moody’s and Caisse des Dépôts and its R&D in computer vision has been partially funded by the European Space Agency (ESA) and French government space agency CNES.

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CANDRIAM, which stands for “Conviction AND Responsibility In Asset Management”, is a European multi-specialist asset manager. A pioneer and leader in the field of sustainable investment since 1996, CANDRIAM manages approximately €150 billion of assets and relies on a team of more than 600 professionals. The company has management centers in Luxembourg, Brussels, Paris, and London, and its client managers cover more than 20 countries throughout continental Europe, the United Kingdom, the United States, and the Middle East. CANDRIAM offers innovative and diversified investment solutions in several key areas: bonds, equities, absolute return strategies and asset allocation, a broad and innovative range covering all its asset classes. CANDRIAM is a New York Life company. New York Life Investments ranks among the world’s leading asset managers.

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Société Générale. Active in the real economy for over 150 years, with a solid position in Europe and connected to the rest of the world, Societe Generale has over 133,000 members of staff in 61 countries and supports on a daily basis 30 million individual clients, businesses and institutional investors around the world by offering a wide range of advisory services and tailored financial solutions. The Group is built on three complementary core businesses: French Retail Banking which encompasses the Societe Generale, Credit du Nord and Boursorama brands - each offers a full range of financial services with omnichannel products at the cutting edge of digital innovation; International Retail Banking, Insurance and Financial Services to Corporates, with networks in Africa, Russia, Central and Eastern Europe and specialised businesses that are leaders in their markets; Global Banking and Investor Solutions, which offers recognised expertise, key international locations and integrated solutions. Societe Generale is included in the principal socially responsible investment indices: DJSI (World and Europe), FTSE4Good (Global and Europe), Bloomberg Gender-Equality Index, Refinitiv Diversity and Inclusion Index, Euronext Vigeo (Europe and Eurozone), STOXX Global ESG Leaders indexes, and the MSCI Low Carbon Leaders Index (World and Europe).