The Big Three: Inflation, GDP, and Unemployment

10 Pages Posted: 21 Oct 2008

See all articles by Peter Marcel Debaere

Peter Marcel Debaere

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Abstract

This note gives descriptive statistics of inflation, GDP (growth), and unemployment. How the statistics are calculated is discussed and issues specific to the 'Big Three' are mentioned. The note is part of the refresher course in Economics at Darden for incoming MBA students

Excerpt

UVA-G-0598

The Big Three: Inflation, GDP, and unemployment

Inflation, gross domestic product (GDP) growth, and unemployment are three indicators that are carefully monitored by consumers, firms, and policy-makers worldwide. Hundreds of people are involved in gathering that data. They are the scorecard of an economy and give a sense of its overall health. In this note, key issues that relate to the “big three” are discussed.

Inflation

Inflation, the money supply, and central bank independence

Inflation captures the change in the overall price level. For central banks around the world, inflation is a key indicator. Central banks are typically in charge of controlling inflation. To do so, they use monetary policy. To keep inflation in check, central banks try to control the money supply. Figure 1 suggests that they have good reason to focus on the money supply. Indeed, there is a strong positive correlation between the percentage changes in the money supply and the percentage changes in the price level.

. . .

Keywords: indicators, macroeconomics

Suggested Citation

Debaere, Peter Marcel, The Big Three: Inflation, GDP, and Unemployment. Darden Case No. UVA-G-0598, Available at SSRN: https://ssrn.com/abstract=1279986

Peter Marcel Debaere (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5794

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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