Dr. Paul Schreyer visited our institute as a CEI visiting faculty member from January 15 to April 14, 2025. He had served as Chief Statistician and Director of the Statistics and Data Directorate at the OECD from October 2020 to June 2024. His research focuses on national accounts, economic measurement, productivity, welfare, non-market activities, and prices. We interviewed him about how he became an economist, his areas of research, and his advice for young scholars.
Q. How did you decide to become an economist? Is there any person or any event that influenced your decision?
I don't think there was any particular person who shaped the idea of studying economics, but there were two things that influenced me at the time. One reason was that I was attending a commercial high school in Austria. It was a regular high school, but with additional subjects such as accounting and business management. I had always been interested in these things, and I thought it would be interesting to go from the firm level to an economy-wide level so I took up economics at the University.
The other thing that happened at the beginning of the 1970s was the oil shock. It was a big shock to the world economy that you could see every day. Suddenly, we had car-free weekends to save on petrol. Petrol prices skyrocketed, which was a huge change to the macroeconomic system in Europe and to the world. When you have such big shocks, you see inflation going up, economic growth slowing, and unemployment rising. How do these all hang together? How does it work out? So, this was another reason for me to sign up for economics when I went to university.
Q. Could you please explain your research field 'economic measurement' in words that non-academics can understand?
Well, how would I characterize economic measurement? Essentially, it's about developing concepts that allow you to quantify what is happening in the economy. For example, you might want to measure inflation. Or you want to measure the cost of living. You can't just look out of the window and observe inflation. You have to think about how to select the products whose prices you will follow to measure inflation. Once you have selected the products, you will have a series of price changes. For example, bread has gone up by 5% and tea by 1% and cars have become cheaper. Then you ask, 'How do you aggregate this into one single number?' 'What do you do when products disappear or new products come in, and you can't compare them over time?' So, you need measurement concepts. If you want to know about economic indicators, such as inflation or GDP (Gross Domestic Product), there are many conceptual and practical questions to consider. 'What does it mean when you say prices have gone up?' The challenge is to get them conceptually right, but also to have them work in practice. All this is economic measurement.
Q. Could you please tell us about some other areas you have been working on?
Another area that I have been working on is the system of national accounts. Just as a firm keeps books to record profits and losses, inflows and outflows, and balance sheets, a similar system exists for a country. How to account for the economic flows of a whole country is put down into the system of national accounts, developed by the United Nations. In principle, every country refers to this system and establishes its accounts in line with the official standard. As you can imagine, many decisions must be made to measure Japan's gross domestic product. Japan's Cabinet Office has an institution that establishes the country's accounts.
Q. We learned that you presented seminars on 'well-being' during your stay in Japan. We are quite interested in this topic. Would pursuing 'well-being' be compatible with economic growth?
Let me give you a few beginnings of an answer. Firstly, it is important to have a common understanding of what we mean by 'well-being.' There are two broad concepts of 'well-being.' One is 'subjective well-being' and the other is 'objective well-being. 'Subjective well-being' is when you yourself judge your life situation, for example on a scale from zero to ten. A lot of empirical work has been based on such measures, sometimes referred to as 'happiness' research. Then there are objective measures of 'well-being.' There are two groups within the objective measures of 'well-being.' One is what we could call 'material well-being', such as income, or housing. There are also non-material dimensions of 'well-being.' Here we are talking about health, social connections, safety, and so on.
When you try to find out what matters most to people among a certain number of dimensions, three things typically come up. The first one is health. The second is income, and the third is social connections. So, you want to be in good shape, you want to have a good material condition and you want to have friends. This is almost universal. How other dimensions are valued, often depends on the circumstances. For example, safety comes much higher up the priorities for people in Ukraine than in Japan. That was a long answer but we need to agree on what we are talking about when we mean by 'well-being'. If you consider 'material well-being' as an important part of 'well-being,' it is not in opposition to economic growth because you want a good income, and that is part of your 'well-being.' But there are also instances when the two are in opposition. A good example is the environmental quality of life: pollution. If air quality is poor, that affects your 'well-being,' but it is often a side effect of economic growth. Or if you eat fish from the sea with microplastic in it, there is a conflict between health and material well-being. So, I don't think there is a single answer to this. It depends on which dimension you are looking at.
But the broader debate that keeps coming back is always the question of, "Do we need more indicators to make good policies?" "Do we need more than just the economic indicators?" "Do we need more than GDP?" GDP is a good indicator of economic activity, but it doesn't cover any of the other dimensions I mentioned. So, my answer is that we need GDP, but we also need other indicators. We cannot use only GDP to measure how well a country or policy is doing. During my time at the OECD, I noticed that the Japanese government has long been interested in 'well-being' issues. Yesterday, I visited Reitaku University, because a new 'well-being' center was inaugurated there (the Center for Well-being Research, Reitaku University).
Q. Still, we have heard that Japan's 'well-being' score is rather low.
The score of 'subjective well-being' is low. However, Japan has the highest life expectancy compared to other OECD countries when you look at objective measures. The streets are safe, and the educational system is good. So, objectively, things look different from subjective measures. I also find it sometimes difficult to make international comparisons of the subjective measures because cultural contexts are not necessarily related to objective situations. There are countries with much lower living standards than Japan, yet their 'subjective well-being' is much higher. So, you have to be careful when making international comparisons. It is a fascinating topic that can be explored in depth.
Q. What advice would you give to young scholars or students who are studying economics?
In economics, very broadly speaking, some people focus on economic theory while others focus on measurement or empirical analysis. I think the most interesting part is combining the two by using your theories or concepts to set up measurements. I don't think measurement without theory is very useful. Pure theory is important and intellectually stimulating, but very often, you want numbers to test theories. When you can point to numbers and provide evidence impact tends to be much bigger. There are many areas of economics, and I think the usefulness of combining of theory and measurement is something that holds across the different branches of economics.
It is also a very good experience to be exposed to statistics and data. The first advice that I would give to someone starting to work with statistics and data is, "Don't trust any data." Try to understand how the data was constructed and by whom. Be critical and try to understand where it comes from. Also, understand that there are many concepts used to compile data, and these concepts can greatly influence your understanding of the results. Get your hands dirty by bringing data together yourself, because it creates feedback on the concepts or theory you are using. If you find data that doesn't fit your model, you may need to think more about your theory. Or vice versa, the theory may tell you something that shouldn't happen in the data. I find this interplay quite useful.
Q. We understand that you recently retired from the OECD. Do you have any plans for the future?
Well, my stay here at Hitotsubashi was one of the things that I was looking forward to, and it has happened. I hope that I will be able to continue along this vein, and do research, see new environments, meet new people, and explore new countries. I think that's what I'm looking forward to. As I said, I'm already in the middle of it.
Q. So it has already started!
It has already started, and I hope I'll be able to continue doing this for a while, since it is part of my 'well-being' as well!
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Thank you very much, Dr. Paul Schreyer, for the opportunity to speak with you. We found the interview particularly insightful, especially regarding the challenges of developing concepts when measuring economic activities. Your interview also enhanced our understanding of 'well-being' and the importance of knowing what we are comparing when discussing such issues. It was our great pleasure to have you here, and we wish you all the best in your future research.
Interviewers: Nana Yamamoto and Eriko Yoshida, CEI (recorded on April 10, 2025)
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