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Handbook of Economic Indicators.

Toronto, Ontario: University of Toronto Press, 1992. (189 pp)

Reviewed by Vincent Scott, assistant director of the budget division of the treasury department, City of Toronto, Ontario and member of GFOA's Committee on Governmental Budgeting and Management.

This book, written from the perspective of a professional forecaster, is intended as a fairly comprehensive, self-contained guide to understanding the significance, usefulness and limitations of the major Canadian and U.S. economic indicators and how and where they fit within the framework of the Canadian economy.

The author provides a broad overview of the Canadian economy as it functions today. He adopts a very practical bent and eschews any detailed discussion of economic theory, instead using actual published economic output data as reference points for discussion and analysis. Following a brief introduction covering the concepts of economic decisions, the behavior of economic transactors and the difficulties inherent in economic forecasting, the Canadian economy in aggregate is reviewed from the standpoint of the System of National Accounts. By reference to tables from recent Statistics Canada National Account publications, supplemented with charts depicting historical trends, the reader is guided through the various components of gross domestic product and expenditure and their relationships and the financial flow accounts.

A chapter on public policy covers monetary policy and all aspects of the operations of the Bank of Canada, including not only its influence on exchange rates, interest rates and inflation, but also its use of rhetoric to influence private expectations. Federal government fiscal policy, the national finances and the public debt also are reviewed. Other chapters cover such topics as Canada's international financial transactions and include an extremely useful comparison of the provincial economies. This latter review in particular relies heavily on representative statistics to compare population, labor force participation, gross provincial products, industry shares, government outlays, etc.

In all this discussion, one very useful aspect is that the author continuously cautions as to factors which may influence the reliability of the data or affect interpretation of it.

Two major chapters are devoted to descriptive analysis and commentary on the leading Canadian and, to a lesser extent, U.S. economic indicators. Key numbers, reporting agency and source publication, usual timing, reference period and revision are referenced for all major weekly, monthly, quarterly and annually published indicators, ranging in diversity from car sales and the help-wanted index to money and credit aggregates. The indicators are described in greater or lesser detail, with explanations as to method of collection, level of reliability, timeliness, limitations, differing measures, comparison with the corresponding indicator in the other country and possible sources for further background or information.

A final chapter sums up how good forecasters must, while attempting to eliminate all personal biases, estimate the reliability of information, integrate it into their view of the economy and continuously reevaluate and re-integrate as the data are revised or other information becomes available.

A very practical grounding in technical aspects of the Canadian economy, combined with a wealth of statistical data together with commentary and analysis of all the major indicators, has been condensed into one reasonably sized volume. Nevertheless, it has been written in a highly readable style, as illustrated by the author's characterizations of economic forecasters as solvers of jigsaw puzzles and as editors of a film called "The Past, the Present and the Future." Further, despite the fact that controversial issues such as monetary and fiscal policy are addressed within the perspective of the Canadian economy today, the presentation is wholly objective and nonjudgmental.

Practicing local government financial professionals would generally be familiar with the technical material covered. Nonetheless, given the book's currency combined with its compactness and lucidity, it would make a useful addition to any professional's book shelf, not only as a handy refresher but also for the penetrating insights offered throughout by the author, a leader in the field of economic forecasting in Canada for many years.

Handbook of Economic Indicators is available for $45 (Canadian) for hardcover or $14.95 for paperback from the University of Toronto Press, 10 Saint Mary Street, Toronto, Ontario M4Y 2W8 (416/667-7791).
COPYRIGHT 1993 Government Finance Officers Association
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Scott, Vincent
Publication:Government Finance Review
Article Type:Book Review
Date:Feb 1, 1993
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