Macroeconomic Aggregates

Macroeconomic aggregates are values that represent the sum of all individual data for an economy. Thus, they are used as instruments to measure the situation of the respective country or region and make decisions on economic policy.

 

In other words, the macroeconomic aggregates are indicators that seek to give us an idea of how the economy is doing or how it has evolved in the last period.

At this point, we must remember the macroeconomy. It is the branch of economic sciences that studies the global functioning of a territory. This analyzes the added variables.

Previously, we said that macroeconomic aggregates reflect the sum of individual values. An individual value can be, for example, the monthly income of a person, and the aggregate would be the average income of all individuals who share a nationality.

Similarly, an individual value could be a company's production, while the value-added would be the total production of a country.

Characteristics of Macroeconomic Aggregates

Some characteristics of the macroeconomic aggregates that we can highlight are the following:

· They allow the situation of the economy to be measured in certain aspects such as the level of production, employment, consumption, and the evolution of prices, among others.

· Its measurement is in charge of public entities, such as the Statistics National Institute (INE) in Spain or the National Institute of Statistics and Informatics (INEI) in Peru.

· They allow the corresponding authorities to have a frame of reference for fiscal policy, monetary, and political measures.

· Its measurement is sometimes not made directly but with an approximation method. For example, in the case of inflation, it is not that all the goods and services of the economy are considered, but rather a group of products that make up the basic basket of the average consumer is usually taken as a reference.

Examples

Some examples of macroeconomic aggregates are:

·       Gross Domestic Product (GDP): It is perhaps the best known of these indicators. It represents the monetary value of all final goods and services produced by a territory. This, in a certain period, for example, a month, a quarter, or a year.

·       Gross National Product (GNP): Measures the number of final goods and services developed with the production factors of a country and during a specific period. It is worth specifying that the GDP reflects the production generated by national and foreign factors. Instead, the GNP only considers national factors, inside and outside the national territory.

·       Unemployment: The unemployment rate is calculated by taking the unemployed population, which is that group of citizens of working age who, in turn, actively seek employment. This number is divided by the economically active population, the sum of the employed plus the unemployed.

·       Inflation is the general increase in the prices of goods and services in an economy. This is for a specific period.

·       monetary aggregates: They measure the amount of money in the economy. This, considering lower or higher levels of liquidity.