The Belgian Industrial Confidence Indicator: Leading Indicator of Economic Activity in the Euro Area?

J.J. Vanhaelen, L. Dresse and J. de Mulder

Working Papers from Warwick - Development Economics Research Centre

Abstract: The international press has recently reported on the widely-held view in the financial markets that the movement of the Belgian industrial confidence indicator might precede the euro area business cycles. The initial purpose of this paper is to assess whether this market perception is more than a simple optical illusion, resulting from the inspection of graphical representations of the data. For that, explicitly formalised methods are used to identify the timing of turning points in the industrial confidence indicators for Belgium and for the euro area, and the statistical significance of the differences in timing has been assessed using the Randomization Test proposed by Banerji. We conclude that the turning points in Belgium do in fact significantly lead turning points in the euro area from 1993 onwards.

Keywords: FINANCIAL MARKET; BUSINESS CYCLES; TIME SERIES (search for similar items in EconPapers)
JEL-codes: E32 E44 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2000
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:warwde:12

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