The United Kingdom seems to be in a recovery stage within its economy and is starting to pick up from the bad effects that the economy suffered before the turn of the millennium. The unemployment rate has fallen from 5.4% to 4.7% since 2000 and its inflation has also fallen a considerable amount to a mere 1.3% which compared to 98’ figures was 3.8%. But the economy is still not yet a full speed this is shown by its slow GDP growth rate and also its decrease in FDI from American multinationals mainly which shows that the UK economy has still got a while till it hits a boom period.
Australia one of the richest nations in the world is also in a recovery stage but is more nearer to a boom period than the UK is. The government has lowered tax rates recently and its unemployment has decreased by 2% within a year but is still very high and needs to be solved in order for the economy to be boosted. The GDP of the country is relatively low compared to European and North American nations but still has been rising by 200 billion dollars in 2 years, which is a huge increase. The economy is growing at a very fast rate and in several years will be a very strong economy to compete on the world stage.
Japan arguably has the strongest economy in the world but currently it suffering a depression due to its lack of investment from American multinationals because of the problems occurring in USA. The unemployment rate has risen by 1% in 2 years and the currency is becoming ever weaker due to the rise of inflation within the country. The GDP rate of the nation has fallen by 50 billion dollars, which shows how fragile the economy is and how badly the after-effect of the Asian crisis of 97’ has hit the nation.
Looking at the statistic’s it is easy to see that the figures show a lot about the economy of a nation and how the well businesses are doing within the country. The advantages of having economic indications are very obvious to see the help they provide to economists are astounding. By using the figures people can predict how well the economy will do and if there prediction is correct they will have done enough for there business to have taken the most advantage of the situation. The statistics help the economists to see where the country stands within the trade cycle and what kinds of measures are needed to help the economy to become stronger.
The statistics provides the economists within data that can show them how fast or slow the economy is growing and weather it is growing fast enough to compete with its rival nations on a economic standpoint. The data helps to provide support for theories that economists provide in order to predict the future of the economy. This is important because if the economists cannot support their theories, predictions and forecasts without any proof or evidence then there theories will not be viable. The data provides people support and if compared with previous statistics economists are able to view trends and if combined with market knowledge they are able to predict the growth of the economy successfully.
Another key factor that the statistics support the likelihood for economic growth it the fact that because using the data it will help people to forecast the future and thus reduce the uncertainty within the economy. By doing so it will mean that people will be able to predict the future and how well or bad the economy is doing and thus will increase the confidence within the population, by doing so it will mean that the bases that the indicators relied upon will help the economy grow. The data also will help managers to predict the future and thus help plans to be created, by doing so it will mean that the statistics will be able to help people to survive from economic downturns and reduce the rate of the which the economic growth will decrease by.
But it must be argued that the economic indicators do have their limitations and that they cannot always support the likelihood for economic growth, also the data cannot be over relayed upon. If people over relay on models and economic statistics it may mean that there forecasts my turn out wrong and that the economy suffers. By over relaying on several key indicators it will mean people will base their theories and predictions and a very limited amount of data and the chances of danger arising will arise. To resolve this issue people must account for other variables instead of a limited amount and thus will be able to draw together large amounts of information and draw upon a conclusion, instead of over relaying on several models and key economic indicators.
Also quantitative data has its limitations and thus provides a negative aspect to economic indicators. Quantitative data is statistics all in numbers, by basing all your forecasts upon numbers is a very risky business because the statistics can change very quickly and thus reduce the certainty of forecasts as there support is changed. Also numbers cannot be over relayed upon because they do not represent the informal state of the economy and the numbers need to be analysed before they a conclusion can be made based upon the quantitative data.
Overall it can be concluded that economic indicators can support the likelihood for economic growth because of the support they provide to economists predictions, forecasts and theories upon the future of an economy. But it must be argued that the indicators must not be over relayed upon and that quantitative data does have its negative downturns, the quality of the indicators must not be over relayed upon as well. Because the data can be altered by governments to help public confidence rise to stay high because during depressions the worst can be hidden from the public to show that the economy is not suffering to a large extent when it does suffering disastrously especially within communist nations e.g. USSR, Cuba, Vietnam. But it must be said that although statistics do have there flaws they are very helpful in order to help future planning and forecasting, and for economists to use the indicators to find trends and combine it with there market knowledge to led to successful predications.
