Are Leading Indicators a Useful Tool for Predicting Business Cycles? The Polish Experience

Władysław Milo () and Zuzanna Wośko ()
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Władysław Milo: University of Lodz, Poland
Zuzanna Wośko: University of Lodz, Poland

Chapter 1 in Acta Universitatis Lodziensis. Folia Oeconomica nr 192/2005 - Issues in Modeling, Forecasting and Decision-Making in Financial Markets, 2005, vol. 192, pp 5-25 from University of Lodz

Abstract: From the moment when economists realized that business cycles are important patterns of aggregate economic activity, their main efforts were concentrated on Unding of conjugate indicators of periods of boom and recession. Variables with fluctuations that systematically predate the movements in a general economic activity are called leading variables (LV) or leading indicators (LI). Combining a number of these leading variables into a single indicator provides a representation of cyclical fluctuations. The aims of this paper are to present and briefly discuss theoretical and practical problems of business cycle forecasting based on results of leading indicator analysis, as well as to review the empirical evidence on forecasting performance of leading indicators in Poland.

Keywords: Leading indicators; Business cycle; Reference cycle; Forecasting of business cycles; Spectral analysis; Causality test (search for similar items in EconPapers)
JEL-codes: C01 E02 F00 G00 (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ann:findec:book:y:2005:n:192:ch:01:foe

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