Despite a healthy preliminary GDP release on Friday for the first quarter of 2002, the nation's stock markets had one of their worst weeks since September 11th.  The precipitous decline was echoed by a rise in prices of oil and gold.  These are clear signs that investors fear uncertainty, both of the supply of oil and of the Middle East's impact on price pressure.

     When I report economic releases, I limit my analysis to some indicators which I feel particularly important, either for their market impact or for the story they are telling.  There are however, numerous releases available covering anything from industry-specific groups to international phenomena.  With the release of the Economist Magazine's notable Big Mac Index this week, I figured that a little discussion of some interesting indexes I've run across might be of value or at least good for a laugh.  Incidentally, the Big Max index, which uses PPP in comparing the cost of a Big Mac in countries around the world, suggested that the US dollar today is more overvalued than ever before (in the history of the Big Mac Index).

     I often find myself toiling with the notion of measuring of economic wellbeing.  Nonetheless, a back of the envelope calculation that has often been used for the United States has been the Misery Index.  Simply the sum of the unemployment rate and the inflation rate, the misery index is an effort to capture the idea of "misery" or suffering among the US population.  For all its simplicity, the Misery Index tells a compelling story.  Indeed, the Federal Reserve has often been driven to action based on the same changes in inflation and unemployment.

     Analysts at Merrill Lynch have taken the Misery Index a step further, introducing the Corporate Misery Index, a composite index focused on capturing the amount of "misery" experienced by US firms.  Besides use as an investment tool however, the index should be useful in gauging corporate wellbeing and thus investment activity in the economy.

     Economists often don't have an index available to study.  This can be a serious problem, especially if it clouds political processes.  For example, economists have typically found output figures for the Soviet Union flawed and often non-existent.  Thus, when trying to compare economic growth in the free-world with that of the Soviets, several dilemmas were evident.  Even today the lack of accurate (or truthful) figures persists, a problem accentuated by corruption and tax-evasion.  In spite of these setbacks, some clever solutions have been posited.  Specifically, economists have discovered that electricity usage and economic activity are highly correlated.  That is, by using much more readily available energy usage figures, economists could show that Russia's economy began to pick back up around 1995, despite otherwise dreary governmental figures.

     In many parts of the world, particularly heavily agricultural regions, the collection of economic data is limited.  Nonetheless, crafty economists have found another solution. That is, the CIA collects aerial photographs which can then be analyzed.  From measures such as the amount of land fallow and farmed, inferences can be made about the level of output even when national statistics themselves are not available. 

     There really is no telling the limits of data collection given the advance of computers. As long as the information serves to clarify rather than cloud issues, monetary policy and economic analysis should become both easier and more effective tools.