THE MACROECONOMIC CALENDAR Each month government agencies like the Departments of Labor and Commerce, and private institutions publish a variety reports addressing leading, lagging, and coincident indicators. 1. Lagging indicators, like the unemployment rate and corporate profits, are of little help in forecasting since they change only after the economy begins to shift. 2. Coincident indicators, like personal income and industrial production that move simultaneously with the business cycle are equally unhelpful in forecasting the future. 3. Leading indicators that move in advance of changes in the business cycle are more helpful. Housing starts usually start to increase several months before the emergence of full recovery, and tail off several months before a recession begins. Once again a broad index comes to the rescue. As a manager, you should maintain a close watch on the Conference Board’s Composition Index of Leading Economic Indicators. The index charts the movements of 10 individual leading indicators. Included in this list is the index of consumer expectations, new orders for capital goods, and changes in the money supply. These are chosen because they relate directly or indirectly to changes in fiscal and monetary policy as well as components of the GDP equation. When the Composition Index has trended down 3 to 5 consecutive months, it generally signals a coming recession. A similar sustained upturn of the Index generally indicates economic recovery and expansion. THE YIELD CURVE The yield curve measures the spread between short and long-term interest rates. This curve can take on one of three shapes: normal, inverted, or steep. The normal yield curve typically occurs when investors in bonds expect the economy to expan... ... middle of paper ... ...perceived trough of the business cycle in order to complete your new production or retailing facilities in time for the recovery. Mergers, Acquisitions, and Divestitures While you may have adopted a strategy of expansion through mergers, acquisitions, or policies favoring divestiture of unprofitable or uncomplimentary divisions, macroeconomic considerations can help you decide when to execute your strategy. Stock prices are typically at their highest toward the peak of economic expansion, during the late cycle bull market; and begin falling during the bearish phase of the market cycle that anticipates the downturn. If you have the liquidity, or can borrow the cash, you may want to pursue a countercyclical strategy, waiting for stock prices to plummet during the recession, and selling your "dogs" at a premium as prices move through the bull market toward the peak.
above statement that macroeconomic stability as well as building long-term growth have been critical in the success of these countries. What is macroeconomics stability Macroeconomics stability refers to sustainable economic growth, low and stable inflation, low and stable unemployment and a sustainable balance of payments (BOP) position. These are the four goals that are important for any country to maintain macroeconomic stability. These are measured by key macroeconomic indicators such as GDP
will experience solid economic growth. Actually, financial analysts have stated that the U.S. economy will be characterized by increased consumer spending, increased investments by businesses, reduced rate of unemployment, and reduction in government cut. Some analysts have also stated that the country’s economy will strengthen in 2014 with an average of 2.7 percent or more. However, these predictions can only be understood through an analysis of the current macroeconomic situation in the United
1. Introduction Government enhances the operation of the market system by providing an appropriate legal foundation and promoting competition. Government also provides certain goods which there are non-rivalry in consumption and non-excludability of benefits. Many quasi-public goods also provided by the government because of their large external benefits. To finance those goods and services businesses and households are required to pay taxes. Taxation is among the ways in which government can lessen
Industry overview The automobile industry is one of the key drivers that boosts the economic growth of the country. Since the de-licensing of the sector in 1991 and the subsequent opening up of 100 percent FDI through automatic route, Indian automobile sector is towards its boom. Today, almost every global auto major has set up facilities in the country. The automotive industry in India is one of the largest automotive markets in the world. It was previously one of the fastest growing markets globally