Economic Indicator
An economic indicator is a statistic about an economic activity. It is a measure of economic performance and health. Economic indicators allow analysis of economic performance and predictions of future performance. Examples of economic indicators include unemployment rate, inflation rate, gross domestic product (GDP), balance of trade, and consumer price index (CPI).
History of Economic Indicators
The use of economic indicators dates back to the 18th century. In 1776, Adam Smith wrote about the use of economic indicators in his book, The Wealth of Nations. Smith argued that economic indicators could be used to measure the health of an economy. In the 19th century, economists such as Karl Marx and John Stuart Mill further developed the use of economic indicators. In the 20th century, economists such as John Maynard Keynes and Milton Friedman further developed the use of economic indicators.
Today, economic indicators are used by governments, businesses, and investors to measure and analyze economic performance. Governments use economic indicators to measure the health of the economy and to make policy decisions. Businesses use economic indicators to make decisions about production, pricing, and investment. Investors use economic indicators to make decisions about where to invest their money.
Table of Comparisons
| Indicator | Description |
|---|---|
| Unemployment Rate | The percentage of people in the labor force who are unemployed. |
| Inflation Rate | The rate at which the general level of prices for goods and services is rising. |
| Gross Domestic Product (GDP) | The total value of goods and services produced in a country in a given period of time. |
| Balance of Trade | The difference between the value of a country’s exports and imports. |
| Consumer Price Index (CPI) | A measure of the average change over time in the prices paid by consumers for a basket of goods and services. |
Summary
Economic indicators are important tools for measuring and analyzing economic performance. They are used by governments, businesses, and investors to make decisions about production, pricing, and investment. For more information about economic indicators, visit the websites of the U.S. Bureau of Economic Analysis, the World Bank, and the International Monetary Fund.
See Also
- Gross Domestic Product (GDP)
- Balance of Trade
- Consumer Price Index (CPI)
- Interest Rates
- Exchange Rates
- Employment Rate
- Income Distribution
- Consumer Confidence Index
- Housing Starts
- Retail Sales
