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Dr Paul Duignan on Outcomes 

Paul Krugman is today criticizing those who think that the UK is doing better than France in terms of progressing out of the global financial crisis. While the UK's GDP growth rate is up, it you look at overall progress since 2007 France has done better. 

Krugman calls this the growth rate fallacy - 'no matter how badly an economy has done over an extended period, you proclaim success after a year or two of good growth'. 

This is a common problem in indicator tracking and is a twist on the outcomes theory principle of "equality of input, equality of outcome' which I had an Op Ed on a while ago in regard to school measurement. Here's the formal statement of the principle

It's not enough to just look at the level of an indicator or even the rate of improvement of an indicator when comparing the relative success of different instances. You also need to know something about the base they are coming off before you can make a judgment on how they are doing compared with each other.  

Paul Duignan, PhD, follow on Twitter.com/PaulDuignan; contact me here. Discuss this post in the Linkedin DoView Community of Practice.

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Image source: http://krugman.blogs.nytimes.com/2015/01/02/britains-success-story/