Professional Documents
Culture Documents
Indrajith Aponsu
Department of Economics
University of Colombo
Economics In global context
Or simply,
BOP status
Labour exchange rate
(Knowledge+Skills+Knowhow+)
Demand stability
Fiscal measures
and income gaps
Public debt
Leading-
Indicates before hand likely changes-
Stock market with growth
Stock indices falter when GDP growth begins to decline
Falling reserves indicates X rate under pressure
Lagged
Happens with a delay
Unemployment improves only sometime after a recovery
Rising interest rates chokes growth
Selected Economic parameters
The rate of growth of GDP
The rate of growth of per capita GDP
The rate of unemployment
The sectoral economic growth
The rate of domestic savings
The rate of national investment
Change in the structure of the economy
The capital output ratio
Economic Indicators
The Budget surplus/ deficit current account and
overall
Revenue as a percentage of GDP
The growth of public debt
Corruption
Have a look at
Happiness Index
Life Expectancy
Life Satisfaction
Ecological Footprint.
Selected Qualitative Indicators
Process Indicators
Indicators of good governance
Transparency
Accountability
Non- Discrimination
Equity
Inclusivity
Participation
Gross Domestic Product or GDP
GDP is the key measure of any economy
public savings
Reflects what has not been consumed from the
domestic production ( but, does not reflect what is
available)
National Savings ratio Savings adjusted for net
inflows/ GDP
what is available within the economy
Asians command high levels of savings
Finance related indicators
Narrow Money supply- M1
Cash and demand deposits in circulation
growth
Raising investment is a relaible forecast for faster
growth
Very cyclical in nature ,a dn quite sensitive to growth
Government revenue
higher revenue gives more flexibility
more tax on the private sector
Deficit
The means of financing has implications
Size of it too
Reduction of defcit too have implications
Finance with the rest of the world
Terms of trade
Price of imports in terms of that of locally produced
Deteriorating TOT is a sign of exchange trouble and
Sign that Foreign exchange is leaking out
Trade balance as % of GDP
Exports minus imports
Usually, as a proportion of GDP
Widening trade balance is bad as country is
overspending
Assets and liabilities to the rest of
the world
Capital account balance as % of GDP
current account deficit is financed from
surplus in capital account
More capital inflows means rising liabilities
Nevertheless, we borrow and invite FDIs
Linked rates
Currency rate is fixed , but market operates freely
Currency Board for the HKD
Sri Lankas Place in the International Indexes