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The Leading Indicators

A Short History of the Numbers That Rule Our World

How did we come by the “leading indicators” we place such stock in? We allocate trillions of dollars and make public policy and personal decisions based upon them, but what do they really tell us?

“The leading indicators” shape our lives intimately, but few of us know where these numbers come from, what they mean, or why they rule the world. GDP, inflation, unemployment, trade, and a host of averages determine whether we feel optimistic or pessimistic about the country’s future and our own. They dictate whether businesses hire and invest, or fire and hunker down, whether governments spend trillions or try to reduce debt, whether individuals marry, buy a car, get a mortgage, or look for a job.

Zachary Karabell tackles the history and the limitations of each of our leading indicators. The solution is not to invent new indicators, but to become less dependent on a few simple figures and tap into the data revolution. We have unparalleled power to find the information we need, but only if we let go of the outdated indicators that lead and mislead us.

Zachary Karabell is an author, money manager, commentator, and president of River Twice Research, where he analyzes economic and political trends. Educated at Columbia, Oxford, and Harvard, where he received his PhD, Karabell has written eleven previous books. He is a regular commentator on CNBC, MSNBC, and CNN. He writes the weekly “Edgy Optimist” column for Reuters and The Atlantic, and is a contributor to such publications as The Daily Beast, Time, The Wall Street Journal, The New Republic, The New York Times, and Foreign Affairs.

“Zachary Karabell’s lively account, The Leading Indicators, is a terrific introduction to the range of statistics economists and governments use to address these questions.”

– The New York Times

“Karabell offers an engaging account of the history of these indicators, and his explanation of their flaws is both readable and useful for
non-economists trying to make sense of the barrage of numbers with which they're pelted on a regular basis.”

– The Wall Street Journal

"[The Leading Indicators] demystifies a lot of current debates, explains its subject matter clearly and shows that the major published macroeconomic statistics are neither nonsense nor conspiracy. Most people could read this book with enjoyment and profit.”

– Tyler Cowen, The Washington Post

“How did we get to the era of Big Data? Karabell…mines little known tidbits in the history of economics to explain how individuals, companies, and countries came to rely on statistics like unemployment, inflation, and gross domestic product to describe the wealth of nations….In Karabell's hands economics is no longer ‘the dismal science.’ More storyteller than analyst here, he succeeds in livening up how ‘the economy’ came to be”

– Publishers Weekly

The Leading Indicators presents a potentially dry but important topic in an engaging manner, with wit and intelligence.”

– The Cleveland Plain Dealer

“[A] lucid measurement of how the United States is faring. . . . Readers of this intelligent introduction to iconic economic indices will agree that Karabell makes an excellent case.”

– Kirkus Reviews

“Our understanding of the economy is shaped by the numbers we use to measure it. In this engaging and subversive history, Zachary Karabell tells the story of how the indicators came to rule us, who invented them, what they actually tell us, and why we need to rethink all of them if we are to make sense of the world today.”

– Justin Fox, Executive Editor, Harvard Business Review

“To any who treat the government’s economic data as if it were Holy Writ, Zachary Karabell’s book will come as a revelation. The Leading Indicators is the fast-paced story of the statistics that occupy far too large a part of our national consciousness. If you always suspected that the GDP was a snare and the CPI a delusion, Karabell’s narrative will tell you just how right you were.”

– James Grant, Editor, Grant’s Interest Rate Observer

“We live in a world of Big Data, and we are led to believe that it contains the truth of our lives. But the numbers that we use to tally our wealth, our productivity, and our very worth as human beings are based not on any absolute truth, but on the shifting sands of politics, culture, and the personal quirks of our leaders. Zachary Karabell is a thinker who understands why economics isn't a hard science. The Leading Indicators is a much needed book about economic numbers that tells us how much—and how little—they ultimately mean.”

– Rana Foroohar, Assistant Managing Editor, Time Magazine; Global Economic Analyst, CNN

“An enchanting primer on the origins and foibles of our economic numbers, marked with biting critique—and building toward the case for something new, different and adapted to the digital age.”

– James K. Galbraith, Professor, UT-Austin, and author of Inequality and Instability

“An amusing and eye-opening romp through the history of the powerful numbers, such as the unemployment and inflation rates, that influence the course of national policy. They’re not only out of date, they often point us in the wrong direction. Karabell’s surprising book shows that we don’t know what we think we know, and trillions of dollars hang in the balance.”

– Jane Bryant Quinn, author of Making the Most of Your Money NOW

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