Download Inter-connections between economic data

Inter-connections between economic data
 Average
 Balance of
Household Income Payments ($m)
($,000)
 Current Account
 Exchange Rate
($m)
 GDP ($m)
 Government Budget
Surplus ($m)
 Labour Force
 Money Supply/M1
(000)
($m)
 Terms of Trade
 Unemployment
(base year)
Rate (%)
 CPI (base
year)
 Exports ($m)
 Imports ($m)
 Real GDP
(base year)
Different sets of economic data usually have relationships
with other sets. One may be calculated using another; one
may cause changes in another. The relationship may be in
one direction or it may operate in both directions.
Data Set 1:
Current Account
Data
Set 2:
CPI (base year)/
Money Supply/M1
($m)??
Relationship:
Balance of Payments ($m) Current Account. BOP
=Current, Capital, Financial
Maybe Current Ac/CPI – Inflation pushes up export prices,
OCR Increases – Exchange Rate increases – Exports more
exp/Imports less, export revenue decreases, money supply
increases – inflationary…..also may be linked to increase in
GDP
Data Set 1:
CPI (base year)
Data
Set 2:
Real GDP (base
year)
Relationship: Current Account ($m) GDP ($m)/ GDP ($m)
Real GDP = Nominal GDP/Price Index (CPI) x Base Year
CPI (1000) – Current Account/GDP- Measured as a % of
GDP and GDP (Expenditure) measures Net Exports…Bal of
G & S…
Data Set 1:
Unemployment
Rate (%)
Data
Set 2:
GDP ($m)
Relationship: GDP Increase, Unemployment Decrease –
Vice Versa . Need resources to produce g &
s
Data Set 1:
Labour Force
(000)
Data
Set 2:
Unemployment
Rate (%)
Relationship: Increase in Labour Force – Unemployment
might increase (too much s not enough d),
Vice Versa…Maybe also linked to
GDP/CPI……
Data Set 1:
Exports ($m)
Imports ($m)
Data
Set 2:
Terms of Trade
(base year)
Relationship: Terms of Trade = Export Price Index/Import
Price Index
Data Set 1:
Average
Data
Household
Set 2:
Income ($,000)
Money Supply/M1
($m)
Government
Budget Surplus
($m)
Relationship: Surplus decreases money supply, maybe
caused by an increase in direct taxation
i.e. Disposable Income decreases – reduction in surplus
may increase disposable income and money supply.