The data of macroeconomics is very important for all actors of economic stage. Many times this data generates dissatisfaction, confusion, even revolt. We`ll try to identificate the limits of macroeconomic indicators, insisting on its manipulating character. For example the limits of the income per capita are quite numerous and may be organized by three main categories: the report variables related uncertainties, the effects of the exchange variations and the difficulties of a price system international comparison.Macroeconomic indicators, manipulate, limits, optimize

Florea Adrian

English

Research Papers in Economics

  138 
USING MACROECONOMIC INDICATORS FOR MANIPULATING  
Florea Adrian 
University of Oradea, Faculty of Economics, 1 Universit￿￿ii Street, 410087, Oradea, Bihor, E-mail: 
aflorea@uoradea.ro, Phone: +40259408410 
 
The data of macroeconomics is very important for all actors of economic stage. Many times this data 
generates  dissatisfaction,  confusion,  even  revolt.  We`ll  try  to  identificate  the  limits  of  macroeconomic 
indicators, insisting on its manipulating character. For example the limits of the income per capita are 
quite numerous and may be organized by three main categories: the report variables related uncertainties, 
the effects of the exchange variations and the difficulties of a price system international comparison. 
 
Macroeconomic indicators, manipulate, limits, optimize 
 
Essential elements in achieving macroeconomic indicators are in facts microeconomics indicators which 
integrate  at  different  structure  levels  of  national  economy.  Through  the  market  the  value  of  the 
merchandises is achieved, their transfer from producers to consumers and anticipated level of utility on the 
consumption process.   
An identification macroeconomic result makes up one of the essential elements which leave its obvious 
mark on the national economy profile. Also, macroeconomics results represent the starting point and one of 
the most important elements on strategy substantiation and tactic over national economy development. 
They also represent one of the indicators through the agency of which one can establish the place a national 
economy absorbs in global economic system, same as in different state structures.  
National economics must be seen as multidimensional realities. Each of them has a certain dimension, an 
established structure; a certain potential; defines as a technological and technical level, and through some 
economics performances, level of urbanization, making progress system, etc. 
All  national economy dimensions can be valued,  measured and evaluated on an indexes system.  For 
analyzing and comparing national economies, World Bank uses over 30 groups of indexes.    
As about Romania’s Statistic Yearbook, we find the presentation of GDP on different type of resources 
with  the  help  of  20  indicators  and  17  indexes,  GDP  on  utilities  –  using  8  indicators  and  5  indexes, 
institutional  macroeconomic  aggregate  (7),  the  main  macroeconomic  aggregate  per  capita  –  with  4 
indicators etc. 
Economical quantification of these results is sustained by a specific theory and methodological conception, 
according with market and planed economy. Now the science of economy is using two methodological 
systems for calculating macroeconomic results: 
a)  The system of national accounts 
b)  The system of material production  
National account system is based on the theory of the production factors and the way of recompense of 
each of them: labor – salary, land –rent, capital – profit     
This  system  is  used  especially  in  states  with  market  economy,  but  also  in  some  states  with  planed 
economy. The beginnings of this system is at the end of 17 century when national accounting system of 
developed countries calculated only national revenue and wealth of the nation. The system of national 
accounts after the Second World War became more complex, and starts to offer the main information for 
implementing strategies of development  
The system of material production is based on the theory o productive labor, where only the labor in the 
sphere of material production creates economical goods, in conclusion incomes too. Actually this theory 
knows two extremes: first consider that only the labor that creates material goods is productive labor, and 
the second extreme consider all human activities are productive. 
Both  systems  try  measuring  the  economical  results  using  synthetic  indicators.  Both  systems  have  to 
accomplish the next three functions:   139 
−  Instrument for statistical evidence 
−  Instrument for economical analyze  
−  Instrument for substantiation the decisions and strategies for economical and social decisions  
Between  these  two  systems  are  also  some  differences.  The  most  important  is  how  they  make  the 
identification the sphere of national revenue.  
The limits of the income per capita are quite numerous and may be organized by three main categories: the 
report variables related uncertainties, the effects of the exchange variations and the difficulties of a price 
system international comparison.  
Uncertain or ambiguous variables  
The  GDP  per  capita  is  a  two  variable  ratio  regarded  with  certain  doubts  when  it  comes  to  emerging 
economies. A national accounting aggregate that underestimates the fortune production reality in such 
countries  occupies  the  numerator  position.  First  of  all,  the  domestic  consumption  production  activity, 
which is quite important in the rural areas, is hardly accounted for when it comes to book keeping, since it 
does not actually involve merchandises and it only generates few money flows. Besides, the informal 
economy is in itself hardly noticeable by the national accounting. Yet, this sector may stand for a very 
significant part of the economic activity, 30% of the non-agriculture active population in Latin America, 
45% of the Indian urban occupation, 40% of the Peru’s GDP.  
The population number, occupying the numerator position, is also debatable. Both the accuracy and the 
reliability of demographic data highly depend on administrative capacities, which are weak in most part of 
the underdeveloped economies. The census, which is an irreplaceable instrument yet a very expensive one 
and extremely difficult to organize, already presents a reduced frequency in developed countries as well, 
and moreover in the emerging economies. The announcement regarding the fact the India has one billion 
inhabitants, that Nigeria has 120 million and Brazil has 160 million requires great precautions. One must 
also add that the population level and the GNP/ inhabitant may be conferred upon a political use.  
The result is that no indication is made available regarding the income distribution, which proves to be the 
central issue in various Southern economies. The calculation of the inhabitant income leads to an implicit 
hypothesis of an income egalitarian distribution. We obviously refer to a highly debatable hypothesis in 
such context. The very analysis of the Gini coefficient underlines the way the same income level may 
describe  very  different  situations  when  referring  to  inequalities.  Brazil  and  the  Czech  Republic  have 
comparable development levels but Brazil is characterized by a very inequality distribution (0.634), which 
is definitely not the case for the Czech Republic (0.266). The same may be stated for both Kenya (0.575) 
and Bangladesh (0.283).  
Exchange variations 
In  order  to  compare  data,  it  is  necessary  to  convert  the  information  resulted  from  various  national 
accounting systems into one currency: the dollar. The evolution of bilateral exchange rates between each 
national currency and the dollar actually disturbs the significance of operated calculations. One modality is 
introduced when we shall observe and analyze the product per capita in current dollars throughout several 
periods of time. A country whose currency tends to depreciate, as compared to the dollar, shall see its 
product per capita facing a cut back without such situation signaling deterioration in the domestic fortune 
production.  Conversely,  any  appreciation  shall  lead  to  an  artificial  increase  of  the  living  standard. 
Throughout the past 30 years, the dollar has registered irregular oscillations as compared to many world 
currencies. The obvious solution is to set a reference year for the bilateral exchange rates and such year to 
remain unchanged, which shall allow for longitudinal comparisons although the solution in question may 
not solve all issues.  
Price systems  
The international comparison of living standards based on the product per capita criterion implicitly states 
that the price systems as applied for each national accounting system are comparable. If one is to reckon 
that one economy  consists of two  main  sectors (the changeable  goods sector and the domestic  goods 
sector), it is easily provable that one positive way was introduced. We shall accept that the unique price 
law is imposed for internationally exchangeable goods  while the price of the domestic goods is itself   140 
endogenous as compared to the development level. The price level of non-exchangeable goods is inferior 
in the emerging economies as compared to the prices in the developed economies: this is what we call the 
Balassa-Samuelson effect. Thus, one understands that the current dollar-converted national income shall 
undervalue the actual living standard of developing countries. In order to assess the living standards one 
must evaluate the size of the accessible basket of consumer’s goods and to neutralize the issue involving 
the price at which goods are appraised. It is therefore our duty to rectify such disparities of price levels by 
taking into consideration the internal currency purchasing power, i.e. using the corrected bilateral exchange 
rates with the purchasing power parity and not the official exchange rates.  
Bibliography 
1.  Azam J. P.,  „Theorie macroecomique et monetaire”, Nathan, 1986 
2.  Clower R., Monetary Theory, Penguin Books, 1971 
3.  Guillaumont, P., „Economie du developpement”, Coll. „Themis”, PUF, tom 1, 2005 
4.  Kakwani,  Nanok  C.,  „Income  Ineqaulity  and  Poverty:  Methods  of  Estimation  and  Policy 
Applications”, London, Oxford University Press, 1990 

Economie du developpement”,

Income Ineqaulity and Poverty: Methods of Estimation and Policy Applications”,

Theorie macroecomique et monetaire”, Nathan,

USING MACROECONOMIC INDICATORS FOR MANIPULATING

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USING MACROECONOMIC INDICATORS FOR MANIPULATING

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