Can you gauge the economy with just one number?
A group of economists are creating the Financial Conditions Indicator to chart the economy's direction.
A group of researchers are creating a single indicator – one number – to depict the economy's direction.
Illustration/Newscom
This is interesting...
Skip to next paragraph
Joshua has been managing money for high net worth clients, charitable foundations, corporations and retirement plans for more than a decade.
Recent posts
A group of economists collaborate to create one master Financial Conditions Indicator which will be made up of 44 sub-indicators that are blended together. Kind of like The Precious.
What will go into The One True Indicator?
For example, the FCI will include the price of the Wilshire 5000 stock index, the interest rate spread between the 10 year T Note and the 3 month T Bill, the total quantity of all commercial paper outstanding and a Michigan credit availability survey or two. These 44 data points and readings will come together to give us one number by which to judge the entire financial picture.
I've only skimmed the paper itself (55 pages) but economists and policy wonks may want to really dive in, the downloadable PDF is below:
Add/view comments on this post.
-------------------------
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.
Become part of the Monitor community
36K on Facebook | 12K on Twitter | 2,250 on YouTube