Sunday, February 26, 2006

Weird World of Economics

I've been doing a great deal of reading on forecasting of economic and financial data over the last few weeks. This field of study is relatively new to me, but is quite interesting nonetheless. There are a lot of books that focus on the topic of business, economics, and how weird the two are, including and The Undercover Economist. I've read the first and thought it was great -- the latter is sitting on my desk, waiting for me.

As I've been researching, I've come across my own interesting facts and tidbits... There are three that stand out.

First, CWJ Granger's Forecasting in Business and Economics talks about a "blueprint indicator" -- apparently, some economists believe that by monitoring the amount of sales of blueprints, you can predict investment in the future. Why? Because companies need blueprints to draw up investment plans, and so the two are correlated.

Secondly, the Conference Board's Help Wanted Advertising Index -- the group scans help wanted ads in newspapers to predict how unemployment will be doing in the future. This one is much more sensible than the blueprint one -- I personally like the idea.

And finally, a historical fact in Macroeconomics: Canadian Edition one can learn about Germany's and Britain's "paper weapon". It appears as though both countries planned to print each others' currency and drop bombs filled with this currency onto their streets. Doing so would lead to inflation, causing economic problems.

Welcome to the weird world of economics. Everything makes sense, in its own way.


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