I would characterize quarterly GDP growth estimates as being of medium reliability. They are subject to frequent, and sometimes sizable, revisions. As another check on the GDP growth numbers I just cited, we can look at a second method that calculates gross domestic income, or GDI. In theory, GDI should equal GDP, but that's rarely the case in practice.

Also, statistical noise or measurement issues may have played some role. This is not the first time in recent years that real GDP has been reported to decline, or grow unusually slowly, in the first quarter of the year. There is a healthy debate among economists--many within the Federal Reserve System--about some of the technical factors that may lie behind this pattern.

Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.

Although the field is still young, there have been interesting developments in the measurement of economic well-being. In a commencement address two years ago titled "The Economics of Happiness," I spoke about the concepts of happiness and life satisfaction from the perspective of economics and other social science research.Following the growing literature, I define "happiness" as a short-term state of awareness that depends on a person's perceptions of one's immediate reality, as well as on immediate external circumstances and outcomes. By "life satisfaction" I mean a longer-term state of contentment and well-being that results from a person's experiences over time. Surveys and experimental studies have made progress in identifying the determinants of happiness and life satisfaction. Interestingly, income and wealth do contribute to self-reported happiness, but the relationship is more complex and context-dependent than standard utility theory would suggest.Other important contributors to individuals' life satisfaction are a strong sense of support from belonging to a family or core group and a broader community, a sense of control over one's life, a feeling of confidence or optimism about the future, and an ability to adapt to changing circumstances. Indeed, an interesting finding in the literature is that the overwhelming majority of people in the United States and in many other countries report being very happy or pretty happy on a daily basis--a finding that researchers link to people's intrinsic abilities to adapt and find satisfaction in their lives even in very difficult circumstances.

This line of research has generated alternative measures of well-being that are frequently survey-based and incorporate elements such as psychological wellness, the level of education, physical health and safety, community vitality and the strength of family and social ties, and time spent in leisure activities. These measures have begun to inform official statistics and have started to be discussed in policy debates. An interesting and unique case is the Kingdom of Bhutan, which abandoned tracking gross national product in 1972 in favor of its Gross National Happiness index based on a survey that incorporates these types of indicators. Taking the measurement of well-being in a cross-country framework, the Organisation for Economic Co-operation and Development (OECD), as part of its OECD Better Life Initiative, has created a "better life index" that allows a side-by-side comparison of countries according to various quality-of-life indicators that could, at least in principle, be followed over time.4 Other somewhat-more-conventional economic indicators that bear on quality of life, and that accordingly might be developed and followed in more detail, include changes in the distribution of income, wealth, or consumption; the degree of upward mobility in material measures of well-being; indications of job security and confidence about future employment prospects; and households' liquidity buffers or other measures of their ability to absorb financial shocks. All of these indicators could be useful in measuring economic progress or setbacks as well as in explaining economic decisionmaking or projecting future economic outcomes.