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Economic Indicators

 


Lecture 3


Economic indicators are statics about economic activities. 

The economic indicators(macroeconomics indicators) allows analyzing the different aspects of national economy.

Types of Economic Indicators

Economic indicators are classified into 3 group based on time prospective

1. Leading Indicators- Analysis of future prospect of economy(PPI- future price of commodities)

2. Coincident Indicators- Analysis of current prospect of economy(GDP, IIP)

3. Lagging Indicators- analysis of past prospect of economy(WPI)


Economic indicators can be classified into different group based on its nature

Production indicators- GDP, GNP, GNI
Infrastructure & Innovation indicators- Global innovation index, Ease of Doing business index, Network Readiness index
Employment indicators- unemployment rate, LFPR, Misery index, Philip curve
Inflation Indicators- CPI, WPI, Monetary policy(Interest rate)
Stable Governance indicators- Balance and Payments, Budget(Fiscal deficit), Credit rating, Corruption perception index, Laffer curve
Developmental indicators- HDI, GII, Happiness index, MPI, HCI, Ginni coefficient, IMR, MMR


Production/Income level is the most commonly used method to determine the economic development of a country.

GDP, GNP, GVA and National Income

(Click Here)


Developed, Developing and Least Developed Countries

(Click Here)


WPI, CPI, IIP and Inflation

(Click Here)


HDI, GII and MPI

(Click Here)


Global Hunger Index

First Published in 2006 by International Food Policy Research Institute(IFPRI- US) + Welthungerhilfe(German).

2018- Concern Worldwide + Welthungerhilfe

0→No hunger
1→High hunger level

The hunger index is more child oriented rather than representing the whole population(3 out of 4 indicators are child oriented).



Global Innovation Index

First Published in 2007 by INSEAD Business School.

Later it was published by INSEAD + Cornell University+ WIPO

Now it is published by WIPO(world intellectual property organisation) only.

It is measured by taking simple average of two sub-indices

1. Input(5 pillars- Institutions, Infrastructure, Mraket Sophistication, Business Sophistication, Human Capital & Research)

2. Output(2 pillars- Knowledge &Technology, Creative output)



Laffer Curve

Developed by American Economist Arthur Laffer in 1974. It shows the relationship between tax rate and tax revenue. As per the curve tax revenue doesn't increases with increase in Tax rate.

For both 0% and 100% tax rate, tax revenue will be zero.

When tax rate will be 100%, people will not work as all earning will be collected by government as a tax.

So simply increasing the tax rate, will not increase the government revenue.



Other Indexes & Reports

World Bank- Human Capital Index, Ease of doing Business(Part of Doing Business Project), Global Economic Prospect, World Development Report, Business Ready Project/B-READY(earlier Doing Business Project)

International Monetary Fund(IMF)- World Economic Outlook

World Economic Forum(WEF)- Gender Gap Index

United Nations Population Fund(UNFPA)- State of World Population report 2023(India will be the world most populous country by mid 2023)






Table of Contents Lecture 4

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