Handbook of Economic Indicators.

• Author: Scott, Vincent

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...