Macroeconomics and Economic Indicators

other indicators include:

+ real wages + disposable incomes + interest rates + export rates + job vacancies + world economic growht rates + business profitability + real GDP

microeconomic concepts

+ the price mechanism + market efficiency

macroeconomic concepts

+ total surplus + circular flow of income model + economic growth + business cycle + government policy mix

non-official indicators are often about...

1. consumer confidence 2. employment vacancies

6 examples of leading indicators

1. inventories 2. consumer confidence 3. business confidence 4. building approvals 5. bank credit (lending) 6. share prices

6 examples of coincidental indicators

1. retail sales 2. consumer spending 3. investment spending 4. building construction 5. manufacturing output 6. economic growth

3 examples of lagging indicators

1. unemployment 2. debt levels 3. bank deposits (savings)

example of a pro-cylical indicator

bank lending

leading indicators

change before the level of economic activity changes; they predict economic activity; are generally based on expectations/sentiment

official indicators

collated by government institutions such as the Australian Bureau of Statistics, Australian Bureau of Agriculture and Resource Economics (ABARE), Australian Treasury, RBA

lagging indicators

don't show a change until after the level of economic activity has changed

counter-cyclical indicators

indicators move in the opposite direction to economic activity

pro-cyclical indicators

indicators move in the same direction as economic activity

coincidental indicators

move in line with the level of economic activity

economic indicators

pieces of information that can be used to describe the current state of the economy

non-official indicators

provided by banks and other associations such as Wespac Melbourne Institute

economic growth formula

real GDP x minus real GDP x-1 / real GDP x-1 * 100

microeconomics

studies the behaviour of individuals and sectors in the economy, looking at issues such as consumer behaviour or the mining industry

macroeconomics

sudies the performance of the economy as a whole; as well as policies used to imporve the performance of the economy; concerned with the total (agreegate) level of economic activity such as aggregate output and income

example of a counter-cyclical indicator

unemployment