Early warning indicator of economic vulnerability

Shirly Wong (), Chin-Hong Puah, Shazali Abu Mansor and Venus Liew

MPRA Paper from University Library of Munich, Germany

Abstract: The initiative to capture the information content behind the rise and fall of the business cycle has popularized the study of leading indicators. Many of the foreign experiences shared by economically advanced countries reveal that the leading indicator approach works well as a short-term forecasting tool. Thus, exploring an indicator-based forecasting tool for business cycle analysis and economic risk monitoring would provide insight into the Malaysian economy as well as that of other emerging countries. By extending the ideology of indicator construction from the US National Bureau of Economic Research (NBER), the present study demonstrated the strong potential of the leading indicator approach to be a good gauge of the business cycle movement in addition to being a practical and functional early warning indicator for economic vulnerability prediction.

Keywords: Business Cycle; Composite Leading Indicator; Early Warning Indicator (search for similar items in EconPapers)
JEL-codes: C82 E32 E37 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-for, nep-mac and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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