Business

Of the leading economic indicators, I believe that the Index of Consumer Expectations, stock markets, manufacturers new orders, consumer goods and materials and building permits and new housing units are the best indicators of the future health of the economy. The Index of Consumer Expectations reflects the consumers feelings or ideas about the future economic situation such as the availability of jobs.  The stock market is an indicator of the volume of money in circulation, as well as the traders confidence in the current stocks in the trading sector. The manufacturers new orders, if consistent for a certain period of time, indicate a boom in the supply and demand chain.   The rise or fall in building and new housing units is likewise a leading economic indicator especially because investors tend to use this as a gauge of the future economic activity. For example, when Dubais economy was booming, buildings and many infrastructures sprouted like mushrooms. In the late quarter of 2008, the construction industry began to decline. This continued as of this time. Finally, Dubai government has begun to publicly admit that an economic downfall has been on the rise. Before that, there was no admission at all that an economic recession was on the rise, despite the fact that construction and real estate companies laying off workers and closing offices and halting construction.
Index of Consumer Expectations as one of the Leading Economic Indicators
The Index of Consumer Expectations reflects how consumers perceive the economic situation, usually within six months. This perception is taken through a survey, usually on about 5,000 respondents. Typical questions include how the respondents perceive the economic situation within the semester, whether it would be stabilized, rise or fall. Another typical question is how the respondents perceive the availability of jobs and even the rise or stability in the current wages. The results of the Index of Consumer Expectations are analyzed and merged with the Index of Consumer Confidence. The data collected are appraised and quantitatively analyzed by businessmen, and used as one of the references for making business or investment decisions. If the Index of Consumer Expectations is high, investors may decide to pursue with a business development project. If the consumers demonstrate pessimistic perception regarding the economy, then investors may decide to forego with business development plans.
The Types of Policies I Would Advocate to Stimulate the US Economy
If I were one of the advisors to the Obama administration, among the economic policies that I would advocate is to promote the export industry. The export system tends to stimulate the production of goods and services, providing more employment and then, increases the buying power of the consumers. Another economic policy which I would advocate is to provide incentives and support to the business investors and manufacturers to enhance and uphold their business infrastructures because this will sustain the business sector in times of recession. Another economic policy which can be advocated is to moderately increase government spending to pump up the economy. In a recession, the consumers spending tends to go down because of the decline in their buying power. This can be compensated for if the government will spend more, but not too much as this will also cause inflation.
My Economic Way of Thinking
I tend to be inclined in the Keynesian economic principle. In this theory, the future of the economy can be predicted by analyzing the consistent direction of the leading indicators. These leading indicators are among the aggregates that build the economy. In our time, we have witnessed enough scenarios that prove how relevant the interplay of economic aggregates is to the future of the economy. We have seen how the housing, real estate and credit crunch provided signs of a forthcoming recession in the United States, as well as many other countries around the world. The paradigm that economic aggregates such as stock market, unemployment, housing and real estate, and manufacturing orders and inventories are not relevant to the economic conditions is no longer viable. As a matter of fact, the business sector, particularly, the investors, view these economic aggregates as the key to making business decisions, For example, whenever the stocks decline, businessmen and investors immediately pull out of business deals related to the  falling stocks. When the export industry in a certain country is on the rise, the economy emerges. This is exemplified by the economic boom that China demonstrated.