If you put water on the stove and heat it up, it will at first just get hotter and hotter. You may then conclude that heating water results only in hotter water. But at some point everything changes – the water starts to boil, turning from hot liquid into steam. Physicists call this a “phase transition.”
When Professor Sir Charlie Bean published his review of UK economic statistics in March, he warned that current systems and process were starting to show their age. “We need to take economic statistics back to the future or we risk missing out an important part of the modern economy from official figures,” he said.
Robin Bray-Hurren, a calligrapher and printmaker from South London, asks: "In order for McDonald’s to attain its projected sales growth, how many extra calories would each person in the UK and the USA have to consume?"
Is the Sage of Omaha an investment genius, or just incredibly lucky? In this winning article from the 2015 Young Statisticians Writing Competition, James Skeffington considers whether chance has played a hand in Warren Buffett’s success.
A few years ago, former World Bank president Robert Zoellick pointed out that: "In physics, Nobel prizes are awarded for being correct while in economics they are often awarded for being brilliant." Economist Angus Deaton noted that contrast and pondered how interesting it might be to classify economics laureates into Zoellick’s two boxes. Yesterday Deaton himself won the Nobel prize for economic sciences. He clearly belongs in both boxes.
Government statistical agencies often report official economic statistics as point estimates. Buried within the documents describing their data and methods, there may be an acknowledgment that these are in fact estimates subject to error, but they typically don’t quantify the size of these errors. News releases in turn then present the official estimates with little if any mention of potential error. But I think their failure to communicate this uncertainty gives an incomplete view of the statistics. In my opinion, agencies need to measure and report this more prominently in their news releases and technical publications.
There has been a great deal of attention given to the development of the 'sharing economy' in recent years. It’s the latest in a series of labels trying to sum up the increasing use of digital online platforms which bring customers and providers of goods and services together to bargain directly. The best known examples are Uber and Airbnb, although the definition can stretch to cover eBay, a range of social and community enterprises and non-market transactions such as charity donations.