Just as there are different motivations for wanting to know the weather, there are different motivations for wanting to know current, past, and future economic conditions. A ﬁrm or a government agency whose revenues or tax receipts depend on the level of economic activity needs to be able to plan budgets accordingly. Others, such as the Federal Reserve System and ﬁnancial analysts, need to make decisions based on the state of the economy. An economist needs to know the “facts” about the economy before explaining them.
Clayton-Matthews, Alan, "Endnotes: About Composite Economic Indexes" (1997). Public Policy and Public Affairs Faculty Publication Series. 14.
University of Massachusetts Donahue Institute