Changing the scales

摘要

Recent figures showing that the euro zone's recovery stalled in the second quarter were dismal. But an overhaul of European national accounts is due in September. This will not rewrite the narrative of a feeble and faltering recovery but it will reveal that Europe's economies are bigger than previously reckoned. The revisions will not be on the epic scale of the one in Nigeria earlier this year, which almost doubled its estimated output. But they will raise gdp in Europe's biggest economy, Germany, by 3.3%, in line with the boost to American gdp from a similar exercise a year ago (see chart). European countries are adopting new global standards for what counts as output. These replace rules dating back to 1995, when the internet age had barely begun. By far the biggest change in how output is measured will come from reclassifying research and development (R&D). By treating it as an investment, rather than as if it is being consumed in the course of production, it will add to GDP.