Calculating Consumer Price Index (CPI)

The Consumer Price Index (CPI) is an indicator that measures the average change in prices paid by consumers for a representative basket of goods and services over a set period. It is widely used as a measure of inflation, together with the GDP deflator (see also GDP Deflator vs CPI). […]

Read more

Five Types of Economic Efficiency

Economics is all about efficiency. Most economic issues arise because of scarce resources. Starting from there, we often have to find ways to use, produce, and distribute those resources in the best possible way (i.e., efficient). However, depending on the issue we are looking at, there may be different factors […]

Read more

Government Policies to Reduce Poverty

Poverty is a problem everywhere in the world. In some countries it is more severe than in others, but there are always some people who have to live below the poverty line. The poverty line describes an absolute level of income below which an individual or family is deemed to […]

Read more

The Unemployment Rate

The unemployment rate refers to the share of the total labor force that is without a job but actively seeking work. It is one of the broadest and most widely available indicators of economic activity. In every economy, there are always some people who lose or quit their jobs, while […]

Read more

The Three Most Relevant Economic Indicators

The economy affects all of us. Hence, it is important to keep a finger on its pulse and constantly check where it is headed. Unfortunately however, that is easier said than done. Hundreds of economic reports and surveys are published every month, each of them including dozens of economic indicators and statistics. If you are […]

Read more

Limitations of GDP as an Indicator of Welfare

Gross Domestic Product (GDP) is essentially an indicator of aggregate economic activity. In addition to that it is also frequently used to describe social welfare. The idea behind this is that GDP tends to correlate with consumption, which in turn is commonly used as a proxy for welfare. In other […]

Read more

Gross Domestic Product (GDP)

The Gross Domestic Product, also known as GDP, is arguably the most common indicator to describe a country’s economic performance (see also the world’s top 10 countries by GDP). Generally speaking, it measures the total value of all goods and services produced in an economy over a set period of […]

Read more

Good Deflation vs. Bad Deflation

Deflation is often considered a highly unfavorable phenomenon. Although the idea of falling prices may seem appealing (at least from a consumer perspective), deflation is mentioned among the worst things that can happen to an economy. However there are different types of deflation that have different implications. In other words, the […]

Read more

Do We Really Need Economic Growth?

The principle of economic growth has become quite controversial in recent years. While many economists perceived the necessity of growth almost as a dogma, critics have become increasingly numerous. Because most economies are overexploiting natural and non-renewable resources, the idea of unlimited economic growth seems to be doomed to fail […]

Read more
1 2 3 4