A Real Economic Activity Indicator for Turkey

S. Boragan Aruoba and Cagri Sarikaya ()

Central Bank Review, 2013, vol. 13, issue 1, 15-29

Abstract: This paper presents a monthly indicator of real economic activity for historical accounting and real-time monitoring of business cycles in Turkey. Business conditions, an unobserved component implied by the interaction and co-movement of various macroeconomic variables, are related to a number of observables at multiple frequencies and estimated within a dynamic factor model. We introduce a recession indicator and thereby compare the severity of turbulence/crisis periods during 1987-2011. High degree of uncertainty embodied in the end-of-sample factor estimates complicates real time detection of recessions and thus points to the need for timely information in a forward-looking policy framework.

Keywords: Business cycle; Expansion; Contraction; Recession; Dynamic factor model; Unobserved component; State space model; Macroeconomic forecasting; Real-time analysis (search for similar items in EconPapers)
JEL-codes: C01 C22 E32 E37 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:cebare:v:13:y:2013:i:1:p:15-29

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