Macroeconomic aggregates – What is it, definition and concept | 2022

Macroeconomic aggregates are values ​​that represent the sum of all individual data for an economy as a whole. Thus, they are used as instruments to measure the situation of the respective country or region and make economic policy decisions.

In other words, the macroeconomic aggregates are indicators that seek to give us an idea of ​​how the economy is doing, or how it has evolved in the last period.

At this point, we must remember that macroeconomics is the branch of economic science that studies the global functioning of a territory. This, analyzing the added variables.

Previously, we said that macroeconomic aggregates reflect the sum of individual values. An individual value can be, for example, the monthly income of a person, and the aggregate would be the average income of all individuals who share a nationality.

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Similarly, an individual value could be the production of a company, while the value added would be the total production of a country.

Characteristics of macroeconomic aggregates

Some characteristics of the macroeconomic aggregates that we can highlight are the following:

  • They allow the situation of the economy to be measured in certain aspects such as the level of production, employment, consumption, the evolution of prices, among others.
  • Its measurement is carried out by public entities, such as the National Institute of Statistics (INE) in Spain or the National Institute of Statistics and Informatics (INEI) in Peru.
  • They allow the corresponding authorities to have a reference framework for taking both fiscal and monetary policy measures.
  • Its measurement is sometimes not made directly, but with an approximation method. For example, in the case of inflation, it is not that all the goods and services of the economy are considered, but rather a group of products that make up the basic basket of the average consumer is usually taken as a reference.
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Some examples of macroeconomic aggregates are:

  • Gross Domestic Product (GDP): It is perhaps the best known of these indicators. It represents the monetary value of all final goods and services produced by a territory. This, in a certain period, for example, a month, a quarter or a year.
  • Gross National Product (GNP): It measures the amount of final goods and services developed with the production factors of a country and during a specific period of time. It is worth specifying that the GDP reflects the production generated with national and foreign factors. Instead, the GNP only considers national factors, inside and outside the national territory.
  • Unemployment: The unemployment rate or unemployment rate is calculated taking the unemployed population, which is that group of citizens of working age who in turn actively seek employment. This number is divided by the economically active population, that is, the sum of the employed plus the unemployed.
  • Inflation: It is the general increase in the prices of goods and services in an economy. This, for a specific period of time.
  • Monetary aggregates: They are measures of the amount of money in the economy. This, considering lower or higher levels of liquidity.

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