Managerial Economics MBA assignment 1

GUIDES The Components of

G: GDP & Growth U: Unemployment & Utilization I: Inflation & Interest rates D: Debt & Deficits E: External balances & Exchange rates S: Saving & Investment

JWI 515: Managerial Economics

The purpose of GUIDES is to help the business leader analyze macroeconomic data with confidence and speed. This template is an adaptation of a macroeconomic analysis framework presented in; Weinzierl, Matthew, Jonathan Schlefer, and Ann Cullen. “GUIDES: Insight through Indicators.” Harvard Business School 9-710-044.December 19, 2011 (2011): 1-9.

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G: GDP & Growth Week 1

Real GDP Lagging Yes

Yes

Yes

Yes

Yes Yes

Yes

Yes

Yes

Yes

No

No

No

No

No No

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Not clear Not clear

Not clear

Not clear

Not clear

Not clear Lagging

Lagging

Lagging

Leading

Measures national income and output. GDP is equal to the total expenditures for all final good and services produced within the country.

Measures the value of ac- quisitions of new or existing fixed assets by the business sector. Shows how much new value the economy added through investment rather than spending.

Percentage change in GDP

The real value of output produced by a unit of labor during a certain time.

GDP divided by total population

Real GDP Growth (annual % change)

Gross Fixed Capital Formation

Productivity

GDP per capita PPP (optional)

Meaning Leading / Lagging Current

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U: Unemployment & Utilization Week 1

Unemploy- ment Rate %

Lagging

Yes

Yes

Yes

Yes

No

No

No

No

Not clear

Not clear

Not clear

Not clear Coincidental

The percentage of unem- ployment workers in the total labor force. It is low during good economics times and high during recessions Measures how much of the productive ability of the installed capital base in a country is being used. Conversely, indicates how much capital is going unused.

Capacity Utilization Rate

Meaning Leading / Lagging Current

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I: Inflation & Interest rates Week 2

CPI Lagging Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear Lagging

Lagging

Lagging

Lagging

Compares current price of a fixed basket of goods.

The price for holding money - time value of money.

Compare prices over time of all output in an economy. Measures the relationship between nominal and real GDP.

Represents the long run inflation, transitionary price changes are excluded.

Represents the long run inflation, transitionary price changes are excluded

GDP Deflator (Under “Prices”)

Interest Rate %

Inflation Rate %

Core Inflation

Meaning Leading / Lagging Current

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D: Debt & Deficits Week 3 - Part 1

Indicator Click Indicator to view website data.

Govern- ment Budget

Lagging

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Lagging

Lagging

N/A

Itemized accounting of the payments received by government (taxes or other fees) and the payments made by government. A budget deficit occurs when a government spends more money than it takes in.

The ratio between a coun- try’s government debt and its gross domestic product. A low ratio indicates the country is able to sufficient- ly pay back debts without incurring debts.

Amount of money govern- ment spends on services, infrastructure, etc.

Debt owed to foreign investors.

Debt / GDP

Govern- ment Spending (optional)

External Debt

Meaning Leading / Lagging Current

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D: Debt & Deficits Week 3 - Part 2

Credit Rating (optional)

N/A

Lagging

Coincidental

Yes

Yes

Yes Yes

Yes

Yes

No

No

No No

No

No

Not clear

Not clear

Not clear Not clear

Not clear

Not clear

An estimate of the ability of an entity to fulfill their finan- cial commitments.

The tax rate for corporations.

The tax rate for individuals.

Corporate Tax Rate (optional)

Personal Income Tax rate (optional)

Meaning Leading / Lagging Current

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E: External balances & Exchange rates Week 3 - Part 3

Current Account

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Lagging

Lagging

Lagging

Lagging An economy’s proceeds from trade in good, services, and payments for the factors of production with the rest of the world.

Indicator of sustainability of an economy’s current status. Large deficits indi- cate heavy borrowing from abroad.

A system of money. The value of the money changes over time.

Measures the amount of change, positive or nega- tive, in currency’s value over year.

Current Account to GDP

Currency

Yearly Currency Change

Meaning Leading / Lagging Current

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E: External balances & Exchange rates Week 3 - Part 4

Imports (optional)

Yes

Yes

Yes

Yes

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Amount of good purchased in one country from another.

Amount of goods purchased by foreigners from a country.

Exports (optional)

Meaning Leading / Lagging Current

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Lagging

Lagging

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S: Saving & Investment Week 4

Net National Savings (use website search field)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Lagging

Lagging

N/A

Leading

The sum of private and public savings.

Total business spending on fixed assets, such as facto- ries, machinery, equipment, etc., which provide the basis for future production.

When a person rather than a company saves money to spend or invest later.

The amount of controlling ownership in a business enterprise in one country by an entity based in another country.

Investment as Percentage of GDP (use website search field)

Personal Savings

Foreign Direct Investment

Meaning Leading / Lagging Current

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OPTIONAL Fill In Metrics Relevant to Your Company/Industry.

Indicator

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Not clear

Meaning Leading / Lagging Current

Enter Country Below Trading Economics - website

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Enter Country Below

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