Guide to Economic Indicators: Making Sense of Economics (The Economist)

True to the style of The Economist, this book makes everything seem easier than it really is. However, for people who spend too much time thinking about economic issues, this is actually rather refreshing, much like a cold beer after a long day's work. Some examples: "In the long term, the growth in economic output depends on the number of people working and output per worker (productivity)" (Page 41); Or "In general, the more optimistic consumers are, the more likely they are to spend money. This boosts consumer spending and economic output" (Page 93)... ...One begins to yearn for the days where economics was more of an explanatory and less a mathematical science. The guide is divided into a number of chapters discussing issues and examples related to - How economic activity is calculated, and what the main indicators GDP/GNP/NNI capture and do not capture, as well as what changes in these indicators or their components mean. - Employment indicators such as employment by sector or the unemployment rate - Balance of payments and fiscal indicators, such as tax revenue or budget deficit - Consumer indicators, such as disposable income or consumer confidence and their significance - Investment and savings indicators, such as investment intentions or sales/inventory ratios - Business indicators, including business conditions, auto sales, construction orders and other common stats - Exchange rates and financial market indicators, such as interest rates and money supply. - Prices and wages, like the effect of oil price changes, among others Coverage of the most common and widely available indicators is fairly comprehensive. Given the simplicity of the book, it is better to have a certain level of economic knowledge and opinion to be able to put the content in context. Not much different to reading The Economist, really.

With the current economic conditions, I wouldn't be surprised if there were a lot more people like me trying to make sense out of the World Economy. I wanted a book that would give insight to common principles of economics and allow me to make more sense out of the finance and business reports I view on TV. This isn't it! In fact the book is more a reference tool for things TV reporters and journalists refer to, to support their theories. I found it insightful and will keep coming back to this book when I need an explanation of these indicators. It probably is essential for students and a good starting point for others.

I expected a guide that would assist in determining where we were in the business cycle. This wasn't really it. The book is structured more like an encyclopedia - analyzing each indicator in detail and in isolation. A fine addition to anyone's economic reference books, but disappointed me by failing to treat the economy as an organic whole.

The book itself will be of great use for those analysts who evaluate country risk analysis. Economic indicators sometimes tend to be hard to understand, but this guide makes them easy to comprehend and relate to each other.