Monitoring Regional Economies With Synthetic Indicators

Abstract

The way regional economies change is an increasingly evident concern in developed economies. To meet this need for quantitative analysis of the economic situation, the starting point is analysis of a series of simple indicators in order to learn about the regional economies. But this provides a view of the particular sector described by the indicator used, not an overall view of the economy. For this reason, it becomes necessary to prepare a synthetic regional indicator showing the growth of a particular region with the as little delay and error as possible. For this purpose, the basic economic indicators need to be chosen and the relevant information extracted from them, and they need to be aggregated in such a way as to produce a synthetic indicator summarizing the features common to them all. This study explains the main procedures and techniques for the preparation of traditional synthetic indicators, and their empirical application to the autonomous region of Castilla-La Mancha, Spain.