Trading Economics: A Guide to Economic Statistics for Practitioners and Students PDF
Preview Trading Economics: A Guide to Economic Statistics for Practitioners and Students
1 For other titles in the Wiley Finance series please see www.wiley.com/finance 2 Trading Economics A Guide to Economic Statistics for Practitioners and Students Trevor Williams Victoria Turton 3 This edition first published 2014 © 2014 Trevor Williams and Victoria Turton Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. 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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. It is sold on the understanding that the publisher is not engaged in rendering professional services and neither the publisher nor the author shall be liable for damages arising herefrom. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Library of Congress Cataloging-in-Publication Data 4 Williams, Trevor, 1957– Trading economics : a guide to economic statistics for practitioners & students / Trevor Williams, Victoria Turton.—1 pages cm.—(The Wiley finance series) Includes bibliographical references and index. ISBN 978-1-118-76641-5 (hardback)—ISBN 978-1-118-76631-6 (ebk)— ISBN 978-1-118-76638-5 (ebk)—ISBN 978-1-118-76629-3 (ebk) 1. Finance— Statistics. 2. Money market—Handbooks, manuals, etc. I. Turton, Victoria, 1974– II. Title. HG176.5.W55 2014 330.01′5195—dc23 2014007150 A catalogue record for this book is available from the British Library. ISBN 978-1-118-76641-5 (hardback) ISBN 978-1-118-76631-6 (ebk) ISBN 978-1-118-76638-5 (ebk) ISBN 978-1-118-76629-3 (ebk) Cover image: Shutterstock.com 5 CONTENTS Acknowledgements Introduction Surprise Indices Mapping a New Landscape Note 1 Surveys Surveys and Behavioural Economics Types of Survey Business Surveys Consumer Surveys Conclusion Notes 2 Economic Growth Economic Growth Through the Ages GDP What is GDP? Breaking Down GDP Why is GDP important? How is It Measured? Index Numbers of GDP and the Price Deflators Used in Calculating Them Detailed Breakdown of the GDP Measures A Market Link Components of GDP Conclusion 6 Notes 3 Labour Markets Employment Trends What has Driven the Change? Consequences for Economic Growth Phillips Curve Shows no Durable Trade-Off Exists NAIRU Matters More Employment Measures Why We Measure Unemployment The Nature of Unemployment The Impact of Demographics on Labour Markets Vacancies Changing Labour Patterns The UK in Comparison to Its Global Competitors How do We Extract Value from This? Conclusion Notes 4 Inflation What is Inflation? The History of Inflation Causes of Inflation Earnings/Wage Inflation Price Basket How is Price Inflation Measured? GDP Deflator 7 Why so Many Measures of Inflation? A Focus on the CPI and RPI Why is Inflation Important? Deflation Other Measures of Inflation Targeting How can We Extract Value from This? Conclusion Notes 5 Monetary Statistics Monetary Policy and Inflation Management The UK in a Global Context Central Bank's Role What About the Bank of England? How Monetary Policy Works in the Uk Decomposition of Money Why does Money Supply Matter? Why Is This Sort of Analysis Useful? A Brief History of Monetary Targeting How Do We Extract Value from This? Conclusion Notes 6 Fiscal Indicators A Brief History of UK Fiscal Policy Measuring Government Debt Fiscal Policy Impact and Terminology 8 The Impact of Government on Markets Fiscal Policy and Growth The Data We Should Consider Fiscal Policy in Boom and Bust Market Relevance Bank of England Regains Regulatory Powers What Role Does the Office for Budget Responsibility Play in the Fiscal Policy Process? The Monetary Policy Committee Forward Guidance – Another Bank Innovation The Debt Management Office's Role Comparison of International Debt Fiscal Targets Add Credibility to Debt Reduction How Can We Extract Value from This? Conclusion Notes 7 Global Trade Statistics What Is a Country's Balance of Payments? Why Do We Measure the Balance of Payments? What Does It Mean? The Concept of the Balance of Payments UK Is not Alone in Having a Trade Deficit A Chronic Goods Deficit A Chronic Services Surplus to Offset (Almost) the Trade Deficit 9 The Ever-Changing Pattern of Visible and Invisible Trade Balance of Payments and GDP Shifting Trade Patterns How Can We Extract Value from This? Conclusion Notes Conclusion Be anchored to the data flow Some key points to take away Note Appendices Appendix 1 Surveys CBI Industrial Trends Survey CBI Distributive Trades Survey Notes Appendix 2 Bank of England: Agents' Summary of Business Conditions (January 2014) Appendix 3 Inflation: Contributions to Change in the 12-Month Rate Appendix 4 Voting on Interest Rates by the Monetary Policy Committee – 1997 to January 2014 Appendix 5 Voting on Asset Purchases Financed with central bank reserves by the Monetary Policy Committee – March 2009 to January 2014 10
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