The dangers of extended, but incomplete, accounting for measures of economic performance in a world of imperfect knowledge

The conventions currently employed by national statistical agencies for income and wealth accounting leave out many things relevant to economic performance and human well-being. This has lead to proposals for, and attempts at, more comprehensive accounting. Fully comprehensive accounting is impossible, and the question addressed in this paper is whether a fuller, but incomplete, accounting is guaranteed to be nearer to the truth than the conventional accounting. The answer to this question is 'no'. In general, for example, we cannot be sure that 'genuine saving' would be more accurately measured by extending the list of assets that it covers. The paper sets out the conditions under which greater accuracy would be assured.