Business confidence and cyclical turning points: a Markov-switching approach

Mark Holmes () and Brian Silverstone

Applied Economics Letters, 2010, vol. 17, issue 3, 229-233

Abstract: Markov regime-switching analysis is used to consider the relationship between business confidence and the probability of turning points in cyclical GDP. We find, in an application to New Zealand, that confidence is related to both the deepness and duration of the business cycle and is asymmetric regarding the probability of the economy remaining in a given regime. Overall, the New Zealand business confidence series is a useful indicator of cyclical turning points.

Date: 2010
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Working Paper: Business Confidence and Cyclical Turning Points: A Markov-Switching Approach (2007)
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DOI: 10.1080/13504850701720247

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