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INDEX: A measure of the relative average of a group of items compared to a given base value. Index measures are commonly used in economics to combine and compare diverse measures. One common type of index measure is for prices, such as the Consumer Price Index and the Dow Jones Industrial Average of corporate stock prices. Another noted type of index measure is to track macroeconomic activity, especially the index leading economic indicators. Indexes are usually weighted averages rather than simple arithmetic means that are measured relative to a base value or period. The Consumer Price Index, for example, measures the prices of consumer good, weighted by the quantities purchased. The value of a given period is then stated relative to a base year value, which generates a pure, "unitless" number in the range of 100 (give or take).
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
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EEH
Explorations in Economic History
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