What is "the economy"?

First: a look at the dictionary: Economy is defined as "the structure of economic life in a country, area or period". Economic is defined as: of, relating to, or based on the production, distribution and consumption of goods and services

From MSN Encarta Dictionary: the production and consumption of goods and services of a community regarded as a whole

Our major concern is the links to production, distribution, consumption, and pricing of goods and services. All indicators in the Dashboards are linked to these in one way or another. What we will see is how they relate to the production, distribution, consumption, and pricing of goods and services, and more importantly, how these are related one to another.

Production, distribution, consumption, and pricing are not natural phenomena. People are doing them. They invest, and start firms, which produce and distribute goods and services. People consume goods and services. What we observe and measure with the indicators is the result of the interaction of a huge number of individuals and firms. All these "agents" make decisions along a large number of dimensions. Understanding how the economy works, and trying to predict it, involves studying an extremely complex object, which is not an easy task.

In what follows, we will try to be as simple as possible, and we will try to stay as practical as we can: the point is to teach you how to use some economic reasoning in order to better understand news and better grasp economic data and its implications.

If you want to take a few minutes to try and understand how economists do their job, you can make a detour through our what do economists do section.