A monthly leading indicator of Swiss GDP growth based on Okun’s law

Peter Kugler () and George Sheldon ()
Additional contact information
Peter Kugler: University of Basel
George Sheldon: University of Basel

Swiss Journal of Economics and Statistics, 2023, vol. 159, issue 1, 1-14

Abstract: Abstract We propose a unique method of nowcasting and forecasting GDP growth based on a forward-looking measure of unemployment (FLUR) and Okun’s law that offers a number of advantages over current leading indicators of the Swiss business cycle. The following investigation, covering the period from 1991/1 to 2021/4, demonstrates that our approach outperforms an AR(1) model of GDP growth equally well as the popular Business Cycle Index of the Swiss National Bank and the KOF Barometer with respect to year-to-year growth, but less so in regard to quarter-to-quarter changes. Our findings suggest that our approach offers a reliable and useful indicator to policymakers seeking easily compiled information on the current and future course of the Swiss economy at monthly time intervals.

Keywords: Leading indicator; Higher-frequency data; GDP growth; Unemployment; Okun’s law (search for similar items in EconPapers)
JEL-codes: C53 E37 J64 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1186/s41937-023-00115-w Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sjecst:v:159:y:2023:i:1:d:10.1186_s41937-023-00115-w

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/41937

DOI: 10.1186/s41937-023-00115-w

Access Statistics for this article

Swiss Journal of Economics and Statistics is currently edited by Marius Brülhart

More articles in Swiss Journal of Economics and Statistics from Springer, Swiss Society of Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().