Economic Indicator Definition

The economic indicator is a type of financial data through which we can extract analysis and analyze the economic evolution in line with others. Its statistical character allows its handling throughout the historical series. Thanks to economic indicators, an analyst can control and. And also, the development of the economy and the economic cycle and make predictions about the possible movements that the economy expect to experience.

Types of Economic Indicator

Types of Economic Indicator
Depending on the indicator measures, we can make various classifications that allow the selection of the most adapted indicators to the analysis we want to take out.

In this sense, we can organize the indicators according to their significance, depending on the reaction time, the trend, and the economic field.

Thus, based on time, we can classify the indicators as follows:

Lagging or delayed economic indicator: The value changes once said indicator has already materialized and has experienced changes in the economy.

Economic indicator of cycle or coincident: It is that indicator that undergoes modifications in its value and also. That is the same time that the economy does.

They are leading economic indicators: That indicator that changes before these have materialized in the economy. These indicators allow us to anticipate the natural cycle and apply policies.

On the other hand, depending on the inclination, we can order them as follows:

Acyclic indicator: There is no association between its evolution and the evolution of the economy.

Countercyclical indicator: They go opposite to the general economic trend. If the economy declines, the countercyclical hand will experience an upward trend. And also, it maintains what we would call “inverse correlation”.

Procyclical indicator: Its behaviour is in line with the economic cycle. There is a close association between economic development and the needle.

Depending on the economic field, we can sort the indicators in the following way:

Lab our market indicators: The container of the unemployment rate, the active populace, the activity rate, among others.

Indicators of the economic circumstances and economic growth: The gross domestic product (GDP).

Price and purchasing power indicators: The Consumer Price Index (CPI) inflation, among other indicators.

Financial and statement of accounts indicators: The ROE, ROI,  IRR, and also VAN, etc.

Indicator of commercial operation abroad: The trade balance, and also a balance of payments, etc.

Important of Economic Indicator

Among the most important economic indicators, the next should highlight:

  • Gross domestic product or GDP.
  • Unemployment rate or unemployment rate.
  • Interest rate.
  • M2.
  • Risk premium.
  • Inflation.
  • Consumer Price Index (CPI).
  • Exchange rate.
  • Balance of payments.
  • Level of debt and deficit.
  • and also, Entrepreneur and consumer confidence.

In addition to all the indicators mentioned, some organizations combine indicators for new ones, such as the organization for economic cooperation and development. In this case, said association create the composite indicator, which receives its name for integrating various. Its indicators such as those previously mentioned.

List of the Main Economic Indicators

To conclude and as a summary. It is good to review. The main economic indicators, such as the following:

  • Gross domestic product or GDP
  • Unemployment rate or unemployment rate
  • Type of interest
  • Inflation / Consumer Price Index (CPI)
  • M2
  • Risk premium
  • Exchange rate
  • Balance of payments
  • Debt level and deficit
  • And also, Entrepreneur and consumer confidence.

In short economic indicators is a clear reflection. The symptoms transmitted by an economy. and Its functioning in the present and. They can help us to know and. There are going to be in the future and. In the case of not being like and. And also, it hoped to try to make it as non-disruptive as possible to get the economy back on the right track again with as little cost as possible.

Conclusion

Statistical data about the economy that allows analysis of the past and present financial situation and. Its performance and forecasts for the future. One of the most prominent applications is the study of economic cycles.

Economic indicators include various indexes and expense and earnings reports. For, example and. The unemployment rate. It’s the Consumer Price Index (CPI, a measure for inflation ). And also, it’s Industrial Production, Gross Domestic Product (GDP), etc.

Also Read: What is Finance? – Characteristics, Types, and More

 

 

 

Review Economic Indicator – Definition, Types, Important, and More.

Your email address will not be published.