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Featured entry: Leading indicators

Economic crystal balls. Also known as cyclical ­indicators, these are groups of statistics that point to the future direction of the economy and the BUSINESS CYCLE. Certain economic variables, fairly consistently, precede changes in GDP and certain others precede changes in INFLATION. In some countries, statisticians combine the various different leading indicators into an overall leading index of economic GROWTH or inflation. However, there is not necessarily any causal relationship between the leading indicators and what they are predicting, which is why, like other crystal balls, they are fallible. Contrast with LAGGING INDICATORS.

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Essential Economics

The Economics A-Z is adapted from "Essential Economics", by Matthew Bishop (interviewed here), published by Profile Books.


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