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JWI 515: Managerial Economics

GUIDES Tool

The Components of

GUIDES

G: GDP & Growth

U: Unemployment & Utilization

I: Inflation & Interest Rates

D: Debt & Deficits

E: External Balances & Exchange Rates

S: Savings & Investment

The purpose of the GUIDES template is to help the business leader analyze macroeconomic data with confidence and speed.

NOTE: This template is an adaptation of a macroeconomic analysis framework presented in: Weinzierl, Matthew, Shlefer, Jonathan, and Cullen, Ann. “GUIDES: Insight through indicators.” Harvard Business School 9-710-044. December 19, 2011 (2011): 1-9

Instructions

You will work through the GUIDES template to collect Data Indicators for your two Countries in Assignment 1. You will then complete Assignment 1 by using your data to create an Analysis Report (see Assignment 1 description for details).

I. Save your Template Document:

· The GUIDES Template is a standard Word document

· To save the GUIDES Template on your computer, complete the following steps:

· Go to File > Save As

· Choose your Destination (a folder on your computer)

· Click Save

· Use the following format for your filename: LastName_FirstName_JWI515_GUIDES_Template.docx

· e.g. Doe_John_JWI515_ GUIDES_Template.docx

II. Collect your Data Indicators:

· Enter your two Country names at the top of each page

· Click the link at the top of each page to access the Trading Economics website (hhtp://www.tradingeconomics.com)

· Enter your research data into the Template by clicking into the cells with the Current, Trend, and Healthy? Labels

· In the Healthy? Column, you can delete the answers that are not correct, or you can highlight the correct answer

· Submit your GUIDES Template at the end of Week 3

· Write your Analysis Report, based on the GUIDES data that you researched, and submit your Report at the end of Week 4

G = GDP and Growth Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
GDP	Measures national income and output. GDP is equal to the total expenditure for all final goods and services produced within the country.	Lagging			Yes No Not clear			Yes No Not clear
GDP Growth (annual % change)	Percentage change in GDP.	Lagging			Yes No Not clear			Yes No Not clear
Productivity	The real value of output produced by a unit of labor during a certain time.	Lagging			Yes No Not clear			Yes No Not clear
GDP per capita PPP	GDP divided by total population.	Lagging			Yes No Not clear			Yes No Not clear

U = Unemployment & Utilization Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
Unemploy- ment Rate %	The percentage of unemployed workers in the total labor force. It is low during good economic times and high during recessions.	Lagging			Yes No Not clear			Yes No Not clear
Capacity Utilization Rate	Measures how much of the productive ability of the installed capital base in a country is being used. Conversely, it indicates how much capital is going unused.	Coincidental			Yes No Not clear			Yes No Not clear

I = Inflation & Interest Rates Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
CPI	Compares current price of a fixed basket of goods.	Lagging			Yes No Not clear			Yes No Not clear
GDP Deflator	Compares prices over time of all output in an economy. Measures the relationship between nominal and real GDP.	Lagging			Yes No Not clear			Yes No Not clear
Interest Rate %	The price for holding money – time value of money or cost of money.	Lagging			Yes No Not clear			Yes No Not clear
Inflation Rate %	Represents the long run inflation rate; transitionary price changes are excluded.	Lagging			Yes No Not clear			Yes No Not clear
Core Inflation	Represents the long run inflation; transitionary price changes are excluded.	Lagging			Yes No Not clear			Yes No Not clear

D = Debt & Deficits Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
Debt/GDP	The ratio between a coun- try’s government debt and its gross domestic product. A low ratio indicates that the country is able to sufficiently pay back its debts without incurring debts.	Lagging			Yes No Not clear			Yes No Not clear
Government Spending	Amount of money that government spends on services, infrastructure, etc.	Lagging			Yes No Not clear			Yes No Not clear
External Debt	Debt owed to foreign investors.	N/A			Yes No Not clear			Yes No Not clear

D = Debt & Deficits (cont.) Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
Credit Rating	An estimate of the ability of an entity to fulfill its financial commitments.	N/A			Yes No Not clear			Yes No Not clear
Corporate Tax Rate	The tax rate for Corporations.	Lagging			Yes No Not clear			Yes No Not clear
Personal Income Tax Rate	The tax rate for Individuals.	Coincidental			Yes No Not clear			Yes No Not clear

E = External Balances & Exchange Rates Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
Current Account	An economy’s proceeds from trade in goods, services, and payments for the factors if production with the rest of the world.	Lagging			Yes No Not clear			Yes No Not clear
Currency	A system of money. The value of the money changes over time.	Lagging			Yes No Not clear			Yes No Not clear
Imports	Amount of goods purchased in one country from another.	Lagging			Yes No Not clear			Yes No Not clear
Exports	Amount of goods purchased By foreigners from a country.	Lagging			Yes No Not clear			Yes No Not clear

S = Savings & Investment Click here to access the Trading Economics website

Indicator	Meaning	Leading/ Lagging	Country:	Country:
			Current	Trend	Healthy?	Current	Trend	Healthy?
Personal Savings	When a person rather than a company saves money to spend or invest later.	Lagging			Yes No Not clear			Yes No Not clear
Foreign Direct Investment	The amount of controlling ownership in a business enterprise in one country by an entity based in another country.	N/A			Yes No Not clear			Yes No Not clear

Additional Indicators (optional) Click here to access the Trading Economics website

Use this page to capture data on Indicators that you believe are relevant to understanding your chosen country’s economy or relevant to your specific industry.

Indicator	Meaning	Country:	Country:
		Current	Trend	Healthy?	Current	Trend	Healthy?
				Yes No Not clear			Yes No Not clear
				Yes No Not clear			Yes No Not clear
				Yes No Not clear			Yes No Not clear
				Yes No Not clear			Yes No Not clear

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