Evaluating the German Inventory Cycle Using Data from the Ifo Business Survey

Thomas Knetsch

No 2004,10, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: Inventory fluctuations are an important phenomenon in business cycles. However, the preliminary data on inventory investment as published in the German national accounts are tremendously prone to revision and therefore ill-equipped to diagnose the current stance of the inventory cycle. The Ifo business survey contains information on the assessments of inventory stocks in manufacturing as well as in retail andwholesale trade. Static factor analysis anda methodbuild ing on canonical correlations are appliedto construct a composite index of inventory fluctuations. Based on recursive estimates, the different variants are assessedas regards the stability of the weighting schemes andthe ability to forecast the "true" inventory fluctuations better than the preliminary official releases.

Keywords: inventory investment; revisions; composite indices; canonical correlation; factor models; national accounts data; Ifo business survey; Germany (search for similar items in EconPapers)
JEL-codes: C32 C52 E22 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (6)

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Related works:
Chapter: Evaluating the German Inventory Cycle Using Data from the Ifo Business Survey (2005)
Working Paper: Evaluating the German Inventory Cycle – Using Data from the Ifo Business Survey (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdp1:2019

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