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Macro Indicators - Coggle Diagram
Macro Indicators
Leading Indicators
Stock Market
rise indicates business confidence = economic growth but prices are based on speculation rather than true value of company.
House prices
Decline = number exceeds people looking to buy (price inflated or can't afford to buy). 2008 main example
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Retails sales
very important - accounts for a large proportion of economic activity. Increased means consumer confidence and money spent items that are not necessities. Manufactoring rises with demand and boosts GDP
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Lag Indicators
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primary users policy makers (BoE, gov)
GDP growth rates
CPI and inflation
Currency strength and stability
Labour market statistics
Commodity prices (raw materials that can be bought or sold)
Economic Growth
GDP -
'value of all final goods and services in an economy in a year'.
Income = Output = Expenditure
Measure of Growth
Measure of standard of living standards
BUT
Double counting, informal activity, negative externalities (environment), income inequality, output produced, other quality of life aspects. GDP could increase by 3% but population increase by 5%
GDP/Capita
GDP divided by population
BUT
same issues as GDP
factor income abroad
influence of FDI & repatriation of profit
GNI (per capita)
GNI = GDP + net factor income
Income earned by domestic workers/firms
income earned by foreign workers/firms at home
Green GDP (environment costs of production)
BUT
monetary value on environmental costs difficult
GDP could fall dramatically