COUNTRY GRAPHS
Country graphs give a view of the developments over the last five years of a selection of important short-term economic indicators: Output, Demand, Labour, Prices, Finance and Balance of payments. Data underlying the indicators which are presented in the graphs may be found in the country tables, with the exception of leading indicators for which data may be found in Part One of MEI. Scales have been harmonised for indicators presented on the same graph and across countries according to the method described below in the section on scaling and cross country comparisons. On each graph, the most prominent indicator is represented by a solid black line referring to the left scale when two scales are present on the graph. The second indicator represented by a solid grey line, refers to the right scale. When a third indicator is present it is shown as a dotted line and the associated scale is indicated below the title. A break on the vertical axis indicates that the scale does not start at zero. Grids are shown on each graph for easy reading.
Output
The key indicator in this category is Gross domestic product (GDP) at constant market prices, generally presented on a quarterly basis. Two other indicators are presented where available: the index of Industrial production and the OECD composite leading indicator. The latter is a composite indicator, based on indicators of economic activity, which signals cyclical movements in industrial production six to nine months in advance. The OECD system of leading indicators is described in OECD Leading Indicators and Business Cycles in Member Countries, 1960-1985, Sources and Methods, No. 39, January 1987.
Demand
This graph shows some of the most closely monitored demand indicators in a given country. For many countries these are monthly data on construction and new passenger car registrations.
Labour Market
The key indicator for the Labour market is the Unemployment rate, shown with an indicator on job vacancies. For most countries the latter is Unfilled vacancies, though in some cases New vacancies or Help wanted advertising has been used. The Unemployment rate is shown with a constant scale range of 6 percent for most countries. For more information on these indicators see Sources and Methods: Labour and Wage Statistics, April 1997 and Main Economic Indicators: Sources and Methods, June 2000.
Prices
This graph shows the two most important price indices, the Consumer price index and the Producer price index. For more information on these indicators see Sources and Methods: Consumer Price Indices, April 1994, Sources and Methods: Producer Price Indices, April 1994 and Main Economic Indicators: Sources and Methods, June 2000.
Financial Markets
This graph shows the movements of the typical long and short-term interest rates for each country together with a leading share price index. For more information on these indicators see Sources and Methods: Interest Rates and Share Price Indices, December 1997 and Main Economic Indicators: Sources and Methods, June 2000.
Balance of Payments
The trade and the current balance aggregates of the balance of payments are presented in this graph.
HARMONISING VARIATIONS IN THE GRAPHS
The scales of the graphs have been adjusted with the following main objectives:
- to make the representation of the relative variation of different indicators in the same graph less arbitrary;
- to harmonise scale ranges across countries in order to facilitate cross-country comparisons.
Intra-subject scaling
When several indicators expressed in different units are presented on the same graph, the variations of the indicators are not necessarily comparable. If scales were not adjusted, movements in the Industrial production index, for example, shown against the right scale, would not be comparable with movements in GDP expressed in currency units on the left scale. Not adjusting scales for differences in units could give an arbitrary picture of the variations of the one indicator compared to those of the other indicator.
The following method has been adopted in calculating left and right-hand scales: a given length on the two scales represents the same percentage change in the corresponding indicators.
This method has been applied to the Output and Demand graphs. Since indicators on Prices and Balance of payments are expressed in the same units, harmonisation was not necessary. The method has not been applied to financial indicators because movements in Share prices do not easily relate to movements in Interest rates. For most countries the Labour market indicators presented are the Unemployment rate and Job vacancies. Over the past five years the number of unemployed persons has varied considerably in most OECD countries whereas the change in the number of new job vacancies has been very small in comparison. Because it is not possible to harmonise variations without flattening the Job vacancies curve, some distortion remains between the movements of the two indicators on the Labour market graphs. However, it is kept constant across countries. Another constraint to this graph is cross country comparability, for which the scale range of the Unemployment rate has been fixed at 6 percent for most countries. The common distortion factor then gives the range for the Job vacancies indicator.
Harmonising scale ranges across countries
The scale range has been calculated by category for all countries. Ideally, the largest range would then be used for all countries. However, this is not always possible without flattening some of the graphs. Therefore for each category three different scale ranges were used, which correspond to three groups of countries. The first group covers the majority of "standard" variation countries; the two other groups cover countries with high variation indicators. For instance, for price indicators high inflation countries are in the second group and very high inflation countries in the third group. In addition, a number of indicators in certain countries exhibit trends which could not be harmonised within the three primary groups. In some cases, when the key indicator is not available for a country, an alternative indicator has been selected (for example registered unemployed for Greece and Luxembourg, rather than an unemployment rate). These do not belong to any of the three groups as no scaling adjustment has been carried out. The following table lists by subject the countries which are included in the two high variation groups and those whose scale has not been harmonised:
Table: Harmonising Scale Ranges across Countries
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