WHAT ARE MACROECONOMIC VARIABLES? - ECONOMY - 2025

The macroeconomic variables are the indicators that takes into account a country to understand the economic reality in relation to other countries. Each of these variables generates fundamental information to promote the development of a nation, based on its internal activities and its link with the rest of the world.

Knowing the macroeconomic variables allows us to know which are the activities with the greatest potential and which aspects are most vulnerable, so that it is possible to make decisions that favor the citizens of a country and fortify the economy.

Despite the fact that macroeconomics focuses on the growth and development rates of a country, it does not affect only governments, but also directly affects individualities.

Macroeconomic variables make it possible to understand the context and thus be able to make individual decisions, ranging from buying food to investing in certain businesses.

Most important macroeconomic variables

Gross domestic product

This value, also known by its acronym GDP, is used to determine the total production of a country at a given time. This variable determines the monetary value of all goods and services produced in a nation.

To determine what this total production is, the goods and services produced in full during a given period (usually one year) are taken into account.

There are two types of GDP. On the one hand, there is the nominal GDP, which takes into account the current value of goods and services at the time of the study. Nominal GDP considers other variables, such as inflation and price changes from one moment to another.

On the other hand, there is real GDP, which considers the value of goods and services without taking inflation into account.

To generate this value, nominal GDP is taken and inflation is subtracted. In this way, you have the net value of the product or service, regardless of market fluctuations.

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Rate of inflation

Inflation refers to the continuous increase in the cost of goods and services, which leads to a decrease in the purchasing power of a particular currency.

That is, the more expensive a product or service is, the less value the currency will have, because more monetary units will be needed to purchase said product or service.

Inflation originates as a consequence of excessive money circulating at any given time. With more money, people tend to buy more goods and services, which increases demand and generally leads to higher prices.

There are several ways to measure inflation; one of these is through the Consumer Price Index (CPI).

This index refers to the average change in the value of the prices of goods and services at the time they are purchased by the consumer, in a given period.

Unemployment rate

This indicator refers to the unemployment that exists among the working population of a country.

To obtain this value, the number of working-age citizens who are unemployed and looking for one is taken and divided by the total economically active working-age citizens.

Risk premium

The risk premium is the additional value required by investors when buying the debt of a country, taking as a reference the debt of another country that is considered to be more solid and secure.

It is a surcharge that, in some way, gives a guarantee to investors so that they can run the risk of intervening in the debt of another country.

Balance of payments

The balance of payments is a variable that measures all the transactions of a country with other countries in a given period.

For this indicator, the payments and income of all economic actors in the countries considered are taken into account, including individuals and companies.

Balance of trade

It is a component of the balance of payments. This variable considers only the imports and exports that occurred between one country and others.

To obtain this indicator, the value of exports is subtracted from the value of imports; that is, it is the difference between what a country sells and what it buys.

Offer and demand

Supply refers to the amount of goods and services that suppliers can offer in a given market during a period.

Demand has to do with the quantity of specific goods and services desired by the inhabitants of a country at any given time.

The demand is influenced by different factors, but one of the most relevant is the price of the products: when the price increases, the demand falls; And when the price goes down, the demand goes up.

It is considered that there is an equilibrium between these variables when supply equals demand.

Type of interest

The type or interest rate refers to the amount of extra money that a lender charges when making a loan. This variable is generally materialized as a percentage of the value loaned.

The interest rate can be simple or compound. It's simple when you take into account the value of the original loan; It is compounded when the initial value plus the interest that accumulated over time is considered.

Exchange rate

The exchange rate has to do with the number of units of one currency that is necessary to acquire units of another foreign currency.

When the value of a foreign currency is greater than that of the local currency, the exchange rate is considered to be depreciated.

On the contrary, when the value of that foreign currency is less than that of the national currency, the exchange rate shows an appreciation.

Public spending

It refers to the money used by State institutions and agencies, through governments, to acquire resources and make investments that generate public benefits, such as health, education, transportation, employment and, in general, a better quality of life for people. citizens.

References

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