As well as considering trends in economic growth, inflation, unemployment and the current account position, it is also useful to examine the nature of these changes. Sustainable economic growth is obviously more beneficial than unsustainable economic growth. A fall in unemployment which is accompanied by a rise in employment in full-time, high quality jobs would indicate a healthier economy than a fall in unemployment which either sees a rise in economic inactivity or a rise in employment in low quality, part-time jobs. Stable inflation is preferable to fluctuating inflation as it is easier for the government, firms and households to plan. A decline in a current account deficit caused by an improvement in international competitiveness is more beneficial than a reduction resulting from the economy entering a recession. The former might be more long lasting and may be accompanied by a rise in employment.
A key aspect of the economic health of a nation is the living standards of its citizens. One common measure of living standards is real GDP per head. A high real GDP per head is usually assumed to indicate a high standard of living. There are, however, a number of limitations of this measure. For instance, if income is unevenly distributed, most people may not benefit from a high real GDP per head and the measure does not take into account a range of factors that affect living standards including leisure time and pollution. The Human Development Index (HDI) also fails to include leisure time and pollution but it is more wide ranging than real GDP per head. As well as real GDP per head, it includes life expectancy and education, as measured by adult literacy and school enrolment. Each year the United Nations publishes the HDI index, ranking countries according to their HDI values.
Among other data which can be examined to assess the economic health of a nation are growth in investment, changes in profit levels, changes in foreign direct investment (FDI) and net immigration. A healthy economy might be expected to have increasing net investment, rising profit levels, increasing FDI and net immigration. If an economy is doing well, consumer demand is likely to be increasing. This may lead to higher profit levels which, in turn, may increase net investment. A buoyant economy would also tend to encourage foreign firms to set up in the country and to attract foreign workers to move to the country. Of course, it is possible that rising profit levels may be the result of increased market concentration which in the long term may disadvantage consumers. Increasing FDI may be more the result of a downturn in the countries the firms are coming from and although a desire for improved living standards is the main motive for workers to emigrate, there other reasons including political persecution.
There is no lack of data that can be employed to assess the economic health of a nation. Care, however, has to be taken in selecting and interpreting the information used.