Macroeconomics deals with the study of high-level impacts of a given economic, social, and political environment of a nation. Economic indicators, for a given time, help in determining the health of an economy. It helps in getting the answers to questions like – Where is a nation heading? What is the further growth looking like? As the demand and supply change, so is the production, and so do the economic indicators. These indicators are used by investors to make the investment decisions.
Types of Economic Indicators
Leading indicators
Lagging indicators happen or are measured when events are already occurred. These trailing indicators are used to measure the final result of the economic event.
Eg; unemployment rate. After the implementation of all the policies in a country by a government, the unemployment rate is calculated. This is the final quantified result of the policy implementation.
Lagging indicators
Lagging indicators happen or are measured when events are already occurred. These trailing indicators are used to measure the final result of the economic event.
Eg; unemployment rate. After the implementation of all the policies in a country by a government, the unemployment rate is calculated. This is the final quantified result of the policy implementation.
Coincident indicators
Coincident indicators are in sync with the current event occurrence. They are real-time indicators that denote the present state of an economic event.
Eg; producer price index (PPI). Tracking the price changes in all the sectors indicates the current condition and is the first accurate signal of future changes in inflation.
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