In a general sense, this concept can have several meanings.
For example, "index as an explanatory inscription". labor productivity index.
Or - "index as a way of addressing". A postal code.
Or an index in a matrix - clearly showing the element we mean.
This concept has other meanings. But we are interested in economics.
When economists talk about "index", they usually
mean "a numerical value that is obtained as a result of calculating a certain formula."
Let's start with the simplest - "consumer price index" and "labor productivity index".
The base value is taken, or, as it were, a "reference point".
We select the base value as the "reference point".
Divide the current value by the base value.
The result obtained allows us to compare "was" and "became".
Much like finding a percentage.
And, there are complex and even very complex indices,
the values of which are collected from several dozen indicators.
But, the meaning of these calculations is the same - Compare with each other how "it was" and "became".
This greatly facilitates the understanding of complex economic processes.
See also:
