Confined economies, statisticians (almost) prevented

AUREL

Normally, two hundred INSEE inspectors go to French stores every day to raise prices. This method, which still accounts for 40% of the measurement of inflation in France, disappeared during confinement. It would have been difficult to classify the work of these officers as “Essential” and make them take risks.

The anecdote illustrates the extreme difficulty encountered by all statistical agencies around the world in measuring the evolution of the economy since the start of the pandemic. Face-to-face surveys, such as those on employment or income, have become impossible; they are now carried out by telephone. The questionnaires sent to companies, often online but sometimes still by mail, are less returned than usual, the latter being themselves closed or overwhelmed.

“It is an understatement to say that what we are presenting today is fragile, susceptible to revision”,
Jean-Luc Tavernier, director of INSEE

Rarely has the fog been so thick in the jungle of economic statistics. “You have to resist the urge to put a figure on the recession”, even warned Mervyn King, the former Governor of the Bank of England, in late March. Difficult however to resist for a long time. “It seems to me essential to measure the shock experienced by the economy, essential for decision-makers, essential for economic actors”, Jean-Luc Tavernier, the director of INSEE, explained on March 26 when he published the first serious estimate of the effects of confinement. Its result (35% of the economy was at a standstill) was applauded by many statisticians around the world, who struggled to make such a measurement. However, he immediately added: “It is an understatement to say that what we are presenting today is fragile and susceptible to revision. “

“Alternative sources”

Faced with the emergency, statisticians had to “Innovate, short-circuit the usual extrapolations, exploit alternative sources, pay attention to the work of conjuncturists”, continues Mr. Tavernier in a note published on May 6. INSEE notably used indicators “High frequency” : electricity consumption, bank card transactions, rail transport, etc. The institute also relied on information collected by professional federations or even Medef.

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