Data and policy
Policymakers across the world are trying to figure out how to integrate the power of Big Data into the usual statistics about the state of the economy
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A year ago, the economists on the old technical advisory committee of the Reserve Bank of India had an intriguing discussion on whether the discount wars among online retailers meant that the actual inflation faced by consumers was lower than what was reported in the official statistics.
The festival season this year has once again seen online discount wars—even though the online retailing sector as a whole has been promising investors that it would look beyond expanding sales at any cost.
There is a broader point here. Policymakers across the world are trying to figure out how to integrate the power of Big Data into the usual statistics about the state of the economy. Private sector economists in India have already started to keep a close eye on weekly vegetable prices to figure out what is happening to food inflation even before the government bean counters release official data. More work of this sort needs to be done. The easier availability of algorithms to do Big Data analytics should help.