The Leading Indicators: A Short History of the Numbers That Rule Our World
Karabell traces the history of “leading indicators,” economic statistics including unemployment; inflation; trade; consumer sentiment and spending; the stock market; housing; and Gross Domestic Product (briefly, total market value of all goods and services provided within a country during one year). Leading indicators were designed with limited goals “that describe one reality known as ‘the economy’ but not all reality known as ‘the world we live in.’” In the first half of the twentieth century, leading indicators measured industrial nation-states, while now they measure service-driven developed economies and emerging world industrial economies exporting the goods of multinational companies. Karabell recommends crafting tailored indicators for specific needs using the explosion of information in this era of “Big Data.” Governments should follow the example of the U.S. Federal Reserve in using wide-ranging data and numbers to enhance analysis, many well-run companies develop their own indicators for operational decisions, small businesses need specific indicators for corporate strategy, and individuals using smartphones should access data for creating indicators relating to personal goals. Challenging book. --Mary Whaley