International Economic Indicators and Central Banks is an invaluable guide for anyone doing business overseas or investing in international markets. It is thorough and precise enough for professional economists yet readily accessible to business people and investors. Anne Picker is not only an excellent communicator who demystifies central bank operations and technical economic indicators; she is also a top-notch economist with extensive experience in analyzing them. Don’t read any international economic analysis without this volume close at hand.
Introduction:
Investors are no longer constrained for the most part by political barriers and now seek investments that diversify their portfolios geographically. The move toward globalization has presented investors with worldwide investment opportunities. Anyone interested in making an international investment is interested in the factors that may have an impact on it—be it good or bad. And the good and bad in individual global markets no matter where they are located, can affect a company’s operations and that carries through to their bottom line. It is a rapidly changing world, and one needs to track economic events diligently as they occur. Why should economic growth in Europe, for example, influence a U.S. company’s profits? For one thing, it could be a prime market for that company and its fortunes are tied to it.
The importance of economic data is being recognized everywhere, and vast strides have been made in data quality even over the past year since I began writing this book. Somewhat belatedly, governments are finally appreciating the value of economic data for planning purposes and attracting investment. As a result, the production of indicators is a growth industry in many nations and changes and improvements are being made continually along the way.
Investors in the United States want to know how the economy is growing, whether there is inflation, and if employment and wages are increasing. They want to know the impact of these variables on consumer spending and on the profits of companies engaged in the making and selling of consumer products. Investors are concerned about the outlook for interest rates and how they will affect the value of the dollar, and therefore of the imports that everyone wants to buy. And I could go on. It is no different in Europe, Asia, and Australia. If you are investing in Germany, you would want to know why domestic demand has been lagging other European Monetary Union countries, for example.
The overall goal is to help investors make more informed investment decisions outside of the United States. And the first stop on that road is a brief look at who watches economic data in the financial marketplace. The ‘‘watchers’’ and ‘‘reactors’’ are found in three broad markets: bonds, stocks, and foreign exchange. And because we will be talking about events that can move financial markets wherever they might be located, a brief review of the bond, stock, and currency markets follows the preface in an introduction to the financial markets.
Part I of the book is directed toward an explanation of how central banks operate and why they influence economies and your investments. Part II deals with economic indicators and how that information helps investors understand what is happening economically and why it could influence the behavior of their investments. The data can also point to new avenues of investment opportunity. And since not all indicators are created alike across geographical borders, an understanding of these differences is also important.
This book covers the major industrial countries of Canada, the United Kingdom, Germany, France, Italy, Japan, Australia, and China. The euro-zone or European Monetary Union (EMU) is also included as the umbrella organization for the three European countries covered here. I have chosen to include some brief remarks on China’s central bank, the People’s Bank of China, along with brief profiles of their major economic indicators and their pitfalls. Despite the rudimentary nature of their data and the information about it, it is impossible to overlook the country’s ever-increasing importance in today’s global economy.
Contents:
- Central Banks
- An Overview of Central Banks
- Bank of England
- European Union and the European Central Bank
- Bank of Japan
- Bank of Canada
- Reserve Bank of Australia
- People’s Bank of China
- Economic Indicators
- An Overview of International Economic Indicators
- European Indicators: Eurostat and National Statistics
- UK Indicators
- Japanese Indicators
- Canadian Indicators
- Australian Indicators
- Chinese Indicators