Economic data

# Economic data

Discussion

Encyclopedia
Economic data or economic statistics may refer to data
Data
The term data refers to qualitative or quantitative attributes of a variable or set of variables. Data are typically the results of measurements and can be the basis of graphs, images, or observations of a set of variables. Data are often viewed as the lowest level of abstraction from which...

(quantitative measures) describing an actual economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

, past or present. These are typically found in time-series form, that is, covering more than one time period (say the monthly unemployment rate for the last five years) or in cross-sectional data
Cross-sectional data
Cross-sectional data or cross section in statistics and econometrics is a type of one-dimensional data set. Cross-sectional data refers to data collected by observing many subjects at the same point of time, or without regard to differences in time...

in one time period (say for consumption and income levels for sample
Sample (statistics)
In statistics, a sample is a subset of a population. Typically, the population is very large, making a census or a complete enumeration of all the values in the population impractical or impossible. The sample represents a subset of manageable size...

households). Data may also be collected from surveys of for example individuals and firms or aggregated
Aggregate data
In statistics, aggregate data describes data combined from several measurements.In economics, aggregate data or data aggregates describes high-level data that is composed of a multitude or combination of other more individual data....

to sectors and industries of a single economy or for the international economy. A collection of such data in table form comprises a data set
Data set
A data set is a collection of data, usually presented in tabular form. Each column represents a particular variable. Each row corresponds to a given member of the data set in question. Its values for each of the variables, such as height and weight of an object or values of random numbers. Each...

.

Methodological
Economic methodology
Economic methodology is the study of methods, especially the scientific method, in relation to economics, including principles underlying economic reasoning...

economic and statistical elements of the subject include measurement, collection
Data collection
Data collection is a term used to describe a process of preparing and collecting data, for example, as part of a process improvement or similar project. The purpose of data collection is to obtain information to keep on record, to make decisions about important issues, to pass information on to...

, analysis
Data analysis
Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making...

, and publication of data. 'Economic statistics' may also refer to a subtopic of official statistics
Official statistics
Official statistics are statistics published by government agencies or other public bodies such as international organizations. They provide quantitative or qualitative information on all major areas of citizens' lives, such as economic and social development, living conditions, health, education,...

produced by official organizations (e.g. statistical institutes, intergovernmental organizations such as United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

, European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

or OECD, central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

s, ministries, etc.). Economic data provide an empirical basis for economic research, whether descriptive or econometric. Data archives are also a key input for assessing the replicability of empirical findings and for use in decision making as to economic policy
Economic policy
Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy.Such policies are often...

.

At the level of an economy, many data are organized and compiled according to the methodology of national accounting. Such data include Gross National Product and its components, Gross National Expenditure, Gross National Income
Gross National Income
The GNI consists of: the personal consumption expenditures, the gross private investment, the government consumption expenditures, the net income from assets abroad , and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the...

in the National Income and Product Accounts
National Income and Product Accounts
The National Income and Product Accounts are part of the national accounts of the United States. They are produced by the Bureau of Economic Analysis of the Department of Commerce...

, and also the capital stock and national wealth. In these examples data may be stated in nominal or real values, that is, in money or inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

Economic indicator
An economic indicator is a statistic about the economy. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles....

s include a variety of alternative measures of output
Output
Output is the term denoting either an exit or changes which exit a system and which activate/modify a process. It is an abstract concept, used in the modeling, system design and system exploitation.-In control theory:...

Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

, the labor force
Labor force
In economics, a labor force or labour force is a region's combined civilian workforce, including both the employed and unemployed.Normally, the labor force of a country consists of everyone of working age In economics, a labor force or labour force is a region's combined civilian workforce,...

, confidence
Consumer confidence
Consumer confidence is an economic indicator which measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as...

, prices, and financial series (e.g., money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

and interest rates). At the international level there are many series including international trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...

, international financial flows, direct investment flows (between countries) and exchange rates.

For time-series data, reported measurements can be hourly (e.g. for stock markets), daily, monthly, quarterly, or annually. Estimates such as averages are often subjected to seasonal adjustment
Seasonal adjustment is a statistical method for removing the seasonal component of a time series that is used when analyzing non-seasonal trends. It is normal to report un-adjusted data for current unemployment rates, as these reflect the actual current situation...

to remove weekly or seasonal-periodicity elements, for example, holiday-period sales and seasonal unemployment.

Within a country the data are usually produced by one or more statistical organizations, e.g., a government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

al or quasi-governmental organization and/or the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

s. International statistics are produced by several international bodies and firms, including the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

and the Bank for International Settlements
Bank for International Settlements
The Bank for International Settlements is an intergovernmental organization of central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks." It is not accountable to any national government...

.

Studies in experimental economics
Experimental economics
Experimental economics is the application of experimental methods to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic experiments usually use cash to motivate subjects, in...

may also generate data, rather than using data collected for other purposes. Designed
Design of experiments
In general usage, design of experiments or experimental design is the design of any information-gathering exercises where variation is present, whether under the full control of the experimenter or not. However, in statistics, these terms are usually used for controlled experiments...

randomized experiment
Randomized experiment
In science, randomized experiments are the experiments that allow the greatest reliability and validity of statistical estimates of treatment effects...

s may provide more reliable conclusions than do observational studies. Like epidemiology
Epidemiology
Epidemiology is the study of health-event, health-characteristic, or health-determinant patterns in a population. It is the cornerstone method of public health research, and helps inform policy decisions and evidence-based medicine by identifying risk factors for disease and targets for preventive...

, economics often studies the behavior of humans over periods too long to allow completely controlled experiments, in which case economists can use observational studies
Observational study
In epidemiology and statistics, an observational study draws inferences about the possible effect of a treatment on subjects, where the assignment of subjects into a treated group versus a control group is outside the control of the investigator...

or quasi-experiment
Quasi-experiment
A quasi-experiment is an empirical study used to estimate the causal impact of an intervention on its target population. Quasi-experimental research designs share many similarities with the traditional experimental design or randomized controlled trial, but they specifically lack the element of...

s; in these studies, economists collect data which are then analyzed with statistical methods (econometrics).

Many methods can be used to analyse the data. These include, e.g., time-series analysis using multiple regression, Box-Jenkins analysis
Box-Jenkins
In time series analysis, the Box–Jenkins methodology, named after the statisticians George Box and Gwilym Jenkins, applies autoregressive moving average ARMA or ARIMA models to find the best fit of a time series to past values of this time series, in order to make forecasts.-Modeling approach:The...

, seasonality analysis
Seasonal adjustment is a statistical method for removing the seasonal component of a time series that is used when analyzing non-seasonal trends. It is normal to report un-adjusted data for current unemployment rates, as these reflect the actual current situation...

. Analysis may be univariate
Univariate
In mathematics, univariate refers to an expression, equation, function or polynomial of only one variable. Objects of any of these types but involving more than one variable may be called multivariate...

(modeling one series) or multivariate
Multivariate analysis
Multivariate analysis is based on the statistical principle of multivariate statistics, which involves observation and analysis of more than one statistical variable at a time...

(from several series). econometricians
Econometrics
Econometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...

, economic statistician
Statistician
A statistician is someone who works with theoretical or applied statistics. The profession exists in both the private and public sectors. The core of that work is to measure, interpret, and describe the world and human activity patterns within it...

s, and financial
FINANCIAL
FINANCIAL is the weekly English-language newspaper with offices in Tbilisi, Georgia and Kiev, Ukraine. Published by Intelligence Group LLC, FINANCIAL is focused on opinion leaders and top business decision-makers; It's about world’s largest companies, investing, careers, and small business. It is...

analysts formulate models
Statistical model
A statistical model is a formalization of relationships between variables in the form of mathematical equations. A statistical model describes how one or more random variables are related to one or more random variables. The model is statistical as the variables are not deterministically but...

, whether for past relationships or for economic forecasting
Economic forecasting
Economic forecasting is the process of making predictions about the economy. Forecasts can be carried out at a high level of aggregation - for example for GDP, inflation, unemployment or the fiscal deficit - or at a more disaggregated level, for specific sectors of the economy or even specific...

. These models include both partial equilibrium
Partial equilibrium
Partial equilibrium is a condition of economic equilibrium which takes into consideration only a part of the market, ceteris paribus, to attain equilibrium....

microeconomics
Microeconomics
Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...

aimed at examining particular parts of an economy or economies, or they may cover a whole economic system, as in general equilibrium theory or and in macroeconomics
Macroeconomics
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...

. Economists use these models to understand past events and to forecast future events, e.g., demand
Demand (economics)
In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay . The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time....

, price
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...

s and employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...

. Methods have also been developed for analyzing or correcting results from use of incomplete data and errors in variables.

## Economic data issues

Good economic data are a precondition to effective macroeconomic management. With the complexity of modern economies and the lags inherent in macroeconomic policy instruments, a country must have the capacity to promptly identify any adverse trends in its economy and to apply the appropriate corrective measure. This cannot be done without economic data that is complete, accurate and timely.

Increasingly, the availability of good economic data is coming to be seen by international markets as an indicator of a country that is a promising destination for foreign investment. International investors are aware that good economic data is necessary for a country to effectively manage its affairs and, other things being equal, will tend to avoid countries that do not publish such data.

The public availability of reliable and up-to-date economic data also reassures international investors by allowing them to monitor economic developments and to manage their investment risk
Financial risk
Financial risk an umbrella term for multiple types of risk associated with financing, including financial transactions that include company loans in risk of default. Risk is a term often used to imply downside risk, meaning the uncertainty of a return and the potential for financial loss...

. The severity of the Mexican and Asian financial crisis was made worse by the realization by investors that the authorities had hidden a deteriorating economic situation by slow and incomplete reporting of critical economic data. Being unsure of exactly how bad the economic situation was, they tried to withdraw their assets quickly and in the process caused further damage to the economies in question. It was the realization that data issues lay behind much of the damage done by these international financial crises that led to the creation of international data quality standards, such as the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

(IMF) General Data Dissemination System (GDDS).

Inside a country, the public availability of good quality economic data allows firms and individuals to make their business decisions with confidence that they understand the overall macroeconomic environment. As with international investors, local business people are less likely to over-react to a piece of bad news if they understand the economic context.

Tax data can be a source of economic data. In the United States, the IRS provides tax statistics, but the data are limited by statutory limitations and confidentiality concerns.