Is PMI a good leading indicator of industrial production?: Evidence from India

Snehal S. Herwadkar and Saurabh Ghosh

MPRA Paper from University Library of Munich, Germany

Abstract: The manufacturing Purchasing Managers’ Index is often used by policy makers to gauge the ‘nerve’ of the real economy and as lead indicator of industrial activity. This paper makes an effort to evaluate whether the PMI is indeed a good lead indicator of IIP or whether by relying on PMI the policy makers are making a systematic error. Using ARDL technique, this paper largely support the claim that the PMI is a good lead indicator of industrial activity, albeit only in the short run.

Keywords: purchasing managers' index; economic growth; leading indicator; cross-country; ARDL; industrial activity (search for similar items in EconPapers)
JEL-codes: O57 (search for similar items in EconPapers)
Date: 2020-01-02
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:97924

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