The Leading Indicators: A Short History of the Numbers That Rule Our World Author: Zachary Karabell | Language: English | ISBN:
B00DPM7ZZS | Format: EPUB
The Leading Indicators: A Short History of the Numbers That Rule Our World Description
How did we come by the “leading indicators” we place such stock in? We allocate trillions of dollars and make public policy and personal decisions based upon them, but what do they really tell us?
“The leading indicators” shape our lives intimately, but few of us know where these numbers come from, what they mean, or why they rule the world. GDP, inflation, unemployment, trade, and a host of averages determine whether we feel optimistic or pessimistic about the country’s future and our own. They dictate whether businesses hire and invest, or fire and hunker down, whether governments spend trillions or try to reduce debt, whether individuals marry, buy a car, get a mortgage, or look for a job.
Zachary Karabell tackles the history and the limitations of each of our leading indicators. The solution is not to invent new indicators, but to become less dependent on a few simple figures and tap into the data revolution. We have unparalleled power to find the information we need, but only if we let go of the outdated indicators that lead and mislead us.
- File Size: 4724 KB
- Print Length: 305 pages
- Page Numbers Source ISBN: 1451651201
- Publisher: Simon & Schuster (February 11, 2014)
- Sold by: Simon and Schuster Digital Sales Inc
- Language: English
- ASIN: B00DPM7ZZS
- Text-to-Speech: Not enabled
X-Ray:
- Lending: Not Enabled
- Amazon Best Sellers Rank: #34,282 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
- #3
in Kindle Store > Kindle eBooks > Business & Money > Economics > Econometrics - #6
in Kindle Store > Kindle eBooks > Business & Money > Economics > Statistics - #9
in Books > Business & Money > Economics > Econometrics
- #3
in Kindle Store > Kindle eBooks > Business & Money > Economics > Econometrics - #6
in Kindle Store > Kindle eBooks > Business & Money > Economics > Statistics - #9
in Books > Business & Money > Economics > Econometrics
The book lives up to its title: "The Leading Indicators: A Short History of the Numbers That Rule Our World". It covers the development and shortcomings of "headline" statistics such as gross domestic product, unemployment, and international trade. Readers will learn some eye-opening things, unless they already know the basics of what measures underlie these statistics and why many such statistics suffer from potentially misleading imperfections. For example, headline unemployment (U-3) doesn't include people who have given up looking for work; so if all workers lose their jobs and decide not to look for new jobs, the headline unemployment rate would fall to zero. The book does get a bit repetitive as it goes along, repeating its basic assertions over and over.
Bottom line: If everyone read this book, we'd have a much more informed citizenry.
By JEK
The unemployment figures do not actually tell us about the state of unemployment in a country, GDP figures do not actually give us an accurate measurement of the health of a country’s economy, and the trade deficit between the United States and China may actually be a trade surplus, according to Zachary Karabell in this book.
The book describes the history of a number of economic measurements which we now take for granted. Measurement of unemployment and national income evolved in the wake of the Great Depression, and gross domestic product took over from gross national product as the favoured measure of a country’s economy by the end of the 20th century. What we do not often realise is that these measures were subject to significant limitations at the times when they were invented, and the limitations have become more substantial over the years as the state of technology and the nature of the economy have changed.
Although the book provides a good description of the history of various leading indicators, the extent of the inaccuracies described is not entirely clear. For example, the author explains that every iPhone sold in the US adds $229 to the US-China trade deficit, and every iPad adds $275, although components are sourced from countries other than China and the actual cost of assembly in China is only around $10. However, presumably the components imported into China get counted in China’s trade accounts, so the imports and exports should cancel each other out, but the author does not discuss whether this actually happens.
The book is entertaining and informative, providing a very useful explanation of the key figures used by economists and governments.
By John Gibbs
TOP 1000 REVIEWER
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