Types of economic indicators
An economic indicator is a type of economic data, of a statistical nature. There are various types of economic indicators. Thanks to them, we can carry out an analysis on the economic situation, both past, present and future.
The economic indicator is a type of economic data, by means of which we can extract an analysis and, in accordance with others, analyze the economic evolution. Thanks to economic indicators, an analyst can monitor the evolution of the economy and the business cycle, as well as make predictions about the possible movements that the economy expects to experience. Its statistical character allows its management throughout the historical series.
Thanks to the indicators, we can carry out a continuous analysis on the evolution of the economy around the planet.
Types of economic indicators
Depending on what the indicator measures, we can make various classifications that allow the selection of those indicators most adapted to the analysis we want to carry out.
In this sense, we can classify the types of economic indicators according to their relevance, depending on the reaction time, the trend, as well as the economic field.
Types of indicators, as a function of time
Thus, depending on time, we can classify the indicators as follows:
- Lagging or lagging economic indicator: The value undergoes modifications once, said indicator has already materialized and has undergone changes in the economy.
- Coincident economic indicator: It is that indicator that undergoes changes in its value, at the same time that the economy does.
- Leading economic indicator: That indicator that undergoes modifications before these have materialized in the economy. These types of indicators allow us to anticipate the real economic cycle and apply policies.
Types of indicators, depending on the trend
On the other hand, depending on the trend, we can classify them as follows:
- Acyclical economic indicator: There is no correlation between its evolution and the evolution of the economy.
- Countercyclical economic indicator: They go in a direction opposite to the general economic trend. If the economy slows down, the countercyclical indicator will trend upward. It maintains what we would call "inverse correlation".
- Procyclical economic indicator: Its behavior is in line with the economic cycle. There is a close correlation between the economic evolution and the indicator.
Types of indicators, depending on the economic field
Depending on the economic field, we can classify the indicators as follows:
- Labor market indicators: unemployment rate, active population, activity rate, among others.
- Indicators of the economic situation and economic growth: gross domestic product (GDP), among other related ones.
- Price indicators and purchasing power: Consumer Price Index (CPI), inflation, among other indicators.
- Financial and account status indicators: ROE, ROI, IRR, NPV, among other indicators.
- Indicators of trade operations abroad: trade balance, balance of payments, among other indicators.
Most important economic indicators
Among the most important economic indicators, the following should be highlighted:
- Gross domestic product or GDP.
- Unemployment rate or unemployment rate.
- Type of interest.
- Risk premium.
- Consumer Price Index (CPI).
- Exchange rate.
- Balance of payments.
- Level of debt and deficit.
- Confidence of the entrepreneur and the consumer.
In addition to all the aforementioned indicators, there are organizations that, such as the Organization for Economic Cooperation and Development (OECD), alternate indicators to create new indicators. In this case, said organization created the composite indicator, which receives its name from integrating various indicators such as those previously mentioned.