Business Advisory Blog Business management information from Robert Griffin.

July 12, 2010

Econometric measures “RIP”

Filed under: Griffin Advisory Service — Tags: — Robert Griffin @ 8:47 am

The way we have always known the condition of our economy, and therefore our own probable financial well being, was to look at certain things we tend to refer to as economic indicators, like GDP, Unemployment Rate, Productivity, Inflation, Balance of Trade, etc. And as one looked at these they tended to tell us how we were doing in an economic sense. For example, if GDP is going up, then most likely Unemployment is declining and inflation is minimal, or at least acceptable because people are working and therefore have spendable income, and businesses are making money due to sales growth and productivity gains. There were of course periods where one of the indicators was trending in the wrong direction but that was usually the result of some specific circumstance like the price of oil impacting inflation. Those things tend to be outside the proverbial box, i.e. the economy, where all the other metrics are interrelated.

And there in lies the problem.

  • We have exported our manufacturing out of our control or certainly reduced our influence on it.
  • We have exported the jobs of the average worker
  • The possibility of a balance of trade is now a distant and fading memory

So our economy has changed significantly and we now have much more external, out of our controlso to speak, aspects to it than ever before. That said, how do we now read, interpret and react to the economic indicators that we have always relied on?

More on that next time.

160 Comments

  1. Thanks for the feed back.

    Comment by Robert Griffin — September 24, 2010 @ 7:12 am

  2. Thanks for the feedback

    R Griffin

    Comment by Robert Griffin — October 11, 2010 @ 7:36 am

  3. Hi, yes that’s ok with me as long as I get the reference and the link back to my site.

    Thanks for following.

    Comment by Robert Griffin — May 6, 2011 @ 8:40 am

  4. Sure, as long as you reference the source, my web site.

    Thanks

    Comment by Robert Griffin — August 2, 2011 @ 4:59 pm

  5. That’s not a problem as long as you provide credit back to my blog.
    Thanks

    Comment by Robert Griffin — October 11, 2011 @ 6:41 am

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