Economic Conceptualizations and Indicators

Which economic indicators most impact Americans' assessments about the economy -- people-forward indicators (unemployment, inflation, wage growth) or business-forward indicators (GDP, S&P 500, corporate profits)? Does this vary by income? What beliefs drive these differences? In the early 2020s, experts were puzzled by the phenomenon named “vibecession,” where widespread economic pessimism persisted despite strong GDP and employment figures (Krugman 2025; Long et al. 2023). This type of discordance has long plagued economists and political scientists, who have attributed the cause to cognitive errors, partisan bias, or misinformation (Duch, Palmer, and Anderson 2000; Ramirez and Erickson 2014). However, I argue that this disconnect may reflect a political disagreement about how the economy is conceptualized and thus measured. The American public, informed by their own conceptualizations of the economy, may weigh economic indicators differently than the indicators privileged by experts.