Readings

• "Economic Indicators", "Financial Indicators", and "Emerging Market Indicators", The Economist, July 24, 1999
• Selected U.S. National Income and Product Accounts Tables, Survey of Current Business, August 1998

Economic indicators are variables that provide information about the state of the aggregate economy. These variables are sometimes called macroeconomic time series, because successive measurements occur sequentially in time. The major ways of displaying time series data are a simple tabular listing and a graph called a time-series plot, in which time is recorded on the horizontal axis and the value of the variable is measured on the vertical axis. Time series data display patterns that are of interest to macroeconomists and to anyone whose decisions depend on the state of the economy. These patterns can be observed in part by examining listings and time-series plots of the data. They can also be measured by summary statistics such as the mean, standard deviation, and autocorrelations of a single variable and the correlation between two variables. We refer to these patterns as empirical regularities or stylized facts.

The purpose of this module is to define some of the more important economic indicators and to document some of the empirical regularities or stylized facts that characterize their behavior. Documenting these empirical regularities is a necessary first step, but only a first step, in understanding the macroeconomy. In subsequent modules, we will document additional stylized facts and study economic models that attempt to explain the reasons for the empirical regularities we observe.