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World Economic Indicators

Essay by   •  June 8, 2011  •  Essay  •  353 Words (2 Pages)  •  1,150 Views

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The world economic indicator refers to statistic about the economy. The main purpose and use of economic indicators is to analyze the economic performance and predict the future performance. In a global scenario the main economic indicators play a role in the investment world and determine the world economy.

Economic indicators are the most common economic statistics that economists watch. The indicators are usually viewed in relation to key attributes and literature distinguishes between three different relationships. The first one is the relationship to the business cycles, which is defined by three types of indicators namely: the procyclical economic indicator that move in the same direction as the economy, the countercyclical economic indicator that is characterized by movement in the opposite direction as the economy and lastly the acyclic economic indicator that has no relation to the health of the economy and is generally of little use.

The second distinction of indicators is the attribute of frequency of the data. There are different frequencies of realizing the data that usually range from monthly to annual data. The third attribute is the timing of the economic indicators and therefore one distinguishes between leading economic indicators that change before the economy changes while the lagged economic indicator that change the direction a few quarters after the economy does and finally coincident economic indicator that simply move in tandem with the economy.

The world economic indicators are specific indices and measures that indicate the overall health of the global economy. These indicators include Gross Domestic Product is used to measure economic activity, the unemployment rate, the production and business activity, the price indicators such as producer prices and consumer prices. These are all measures of changes in the price level and thus measure inflation. Another indicators category is the money, credit, and security Markets that measure the amount of money in the economy as well as the interest rates. Further the state of the public finance that captures the government spending and government deficits and debts. Lastly there the international trade indicators measure how much the country is exporting and how much they are importing.

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