Economics for Journalists    Tutorial 1: Intro to Economic Indicator Project    Jeffrey TimmermansWednesday, 8 February, 12
What’s an “economic indicator”?    ✤    Data about some kind of economic activity that helps governments         and citiz...
Some long-established indicators    ✤    Consumer Price Index: tracks changes in prices of consumer goods         (i.e. in...
Types of indicators    ✤    Lagging: an indicator of activity in the recent past (i.e. changes after         the broader e...
What makes a good indicator?    ✤    Is original    ✤    Measures an interesting and important economic activity    ✤    M...
Examples from past classes    ✤    Wedding Dress Indicator: measures the health of the economy by         comparing the sp...
A bad indicator                            Source: Bloomberg BusinessWeekWednesday, 8 February, 12
A worse indicator                            Source: Bloomberg BusinessWeekWednesday, 8 February, 12
Totally off-the-wall indicator                            Source: Bloomberg BusinessWeekWednesday, 8 February, 12
Groups                  1            2         3           4           5        Naushin              Varia     Diana      ...
Please refer to the Economic Indicator Project                              page on the course blog for details on the    ...
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Tutorial1

  1. 1. Economics for Journalists Tutorial 1: Intro to Economic Indicator Project Jeffrey TimmermansWednesday, 8 February, 12
  2. 2. What’s an “economic indicator”? ✤ Data about some kind of economic activity that helps governments and citizens evaluate – and occasionally predict – the overall health of their country’s economy. ✤ “A piece of economic data, usually of macroeconomic scale, that is used by investors to interpret current or future investment possibilities and judge the overall health of an economy.” – InvestopediaWednesday, 8 February, 12
  3. 3. Some long-established indicators ✤ Consumer Price Index: tracks changes in prices of consumer goods (i.e. inflation) ✤ Price of copper: copper is the “backbone” of an industrial economy, yet supply is relatively stable and not that sensitive to price changes. ✤ Book-to-bill ratio: measures to ratio of orders of a product to shipments of that same product over a given time period. A ratio over 1 indicates an order backlog (i.e. indicates an economic expansion) ✤ Ted spread: measures how much more banks have to pay to borrow money than the government pays (i.e. indicates the health of banks)Wednesday, 8 February, 12
  4. 4. Types of indicators ✤ Lagging: an indicator of activity in the recent past (i.e. changes after the broader economy changes) ✤ Coincident: indicates activity in the present (i.e. the current state of the economy ✤ Leading: an indicator of future economic activityWednesday, 8 February, 12
  5. 5. What makes a good indicator? ✤ Is original ✤ Measures an interesting and important economic activity ✤ Measures that activity in an accurate and consistent manner ✤ Closely correlates with a broader measure of the economy in a statistically significant way ✤ Remember: correlation doesn’t imply causation!Wednesday, 8 February, 12
  6. 6. Examples from past classes ✤ Wedding Dress Indicator: measures the health of the economy by comparing the spending on wedding dresses with the change in the annual number of registered marriages ✤ Premium-to-Standard Petrol Indicator: predicts consumer confidence by measuring the ratio of purchases of premium auto fuel to standard fuel ✤ Gym-membership Indicator: attempts to measure unemployment by looking at the change in numbers of gym membershipsWednesday, 8 February, 12
  7. 7. A bad indicator Source: Bloomberg BusinessWeekWednesday, 8 February, 12
  8. 8. A worse indicator Source: Bloomberg BusinessWeekWednesday, 8 February, 12
  9. 9. Totally off-the-wall indicator Source: Bloomberg BusinessWeekWednesday, 8 February, 12
  10. 10. Groups 1 2 3 4 5 Naushin Varia Diana Ish Hui Yi Kat Carolyn Quiteria J Michelle Corey Haruka Catherine Stephanie Mimi Kai Ivy Phoebe Naomi AmyWednesday, 8 February, 12
  11. 11. Please refer to the Economic Indicator Project page on the course blog for details on the requirements, deadlines and assessment criteriaWednesday, 8 February, 12

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