Macro-Economic Indicators

Paper Summary:

This paper explains that the macro-economic changes in the USA and global economy were rather misleading in the 2005 and the reaction of some fundamentals on shifts in other variables was not typical and thus could not always be foreseen or predicted by the analysts. The author points out that one of the methods used to prevent the development of inflation is the manipulation of the official government interest rate or the Federal Reserve discount rate. The paper concludes that there are inflationary expectations in the economy; therefore, households try to consume in order not to lose the value of their cash.

From the Paper:

"Inflation is also a very important measure of economic development and as mentioned above, high inflationary pressure on the economy has overall negative impact. CPI changes or the changes of consumer price index, in the beginning of 2006 compared to 2005 tendency are 3.9%. This rate was only 2.95% in fiscal year 2004, or comparing CPI at the beginning of 2005 with its rate at the beginning of 2004. The inflation in the 2003 fiscal year was even lower and at the rate of 1.97%, while it was 2.58% in 2002."

Sample of Sources Used:

• http://www.mrweb.com/drno/conf-usa.htm
• http://research.stlouisfed.org/
• Mankiw, N. Macroeconomics, 5th Ed., Worth Publishers, 2002.

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