Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Which Indicators Matter? Analyzing the Swiss Business Cycle Using a Large-Scale Mixed-Frequency Dynamic Factor Model

Which Indicators Matter? Analyzing the Swiss Business Cycle Using a Large-Scale Mixed-Frequency... For policy institutions such as central banks, it is important to have a timely and accurate measure of past and current economic activity and the business cycle situation. The most prominent example for such a measure is gross domestic product (GDP). However, GDP is only released at a quarterly frequency and with a substantial delay. Furthermore, it captures elements that are not directly linked to the business cycle and the underlying momentum of the economy. In this paper, I construct a new business cycle index for the Swiss economy, which uses state-of-the-art methods, is available at a monthly frequency and can be calculated in real-time, even when some indicators are not yet available for the most recent periods. The index is based on a large and broad set of monthly and quarterly indicators. As I show, for the case of Switzerland, it is important to base a business cycle index on a broad set of indicators instead of only a small subset. This result confirms the findings of a previous study on tracking short-term economic developments in Switzerland and is in contrast with the results for other countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business Cycle Research Springer Journals

Which Indicators Matter? Analyzing the Swiss Business Cycle Using a Large-Scale Mixed-Frequency Dynamic Factor Model

Journal of Business Cycle Research , Volume 14 (2) – Jul 24, 2018

Loading next page...
 
/lp/springer-journals/which-indicators-matter-analyzing-the-swiss-business-cycle-using-a-RbJ6Fkb5T6

References (47)

Publisher
Springer Journals
Copyright
Copyright © 2018 by Springer International Publishing AG, part of Springer Nature
Subject
Economics; Macroeconomics/Monetary Economics//Financial Economics; Econometrics; Statistics for Business, Management, Economics, Finance, Insurance; Public Finance; Public Finance; Economic Growth
ISSN
2509-7962
eISSN
2509-7970
DOI
10.1007/s41549-018-0030-4
Publisher site
See Article on Publisher Site

Abstract

For policy institutions such as central banks, it is important to have a timely and accurate measure of past and current economic activity and the business cycle situation. The most prominent example for such a measure is gross domestic product (GDP). However, GDP is only released at a quarterly frequency and with a substantial delay. Furthermore, it captures elements that are not directly linked to the business cycle and the underlying momentum of the economy. In this paper, I construct a new business cycle index for the Swiss economy, which uses state-of-the-art methods, is available at a monthly frequency and can be calculated in real-time, even when some indicators are not yet available for the most recent periods. The index is based on a large and broad set of monthly and quarterly indicators. As I show, for the case of Switzerland, it is important to base a business cycle index on a broad set of indicators instead of only a small subset. This result confirms the findings of a previous study on tracking short-term economic developments in Switzerland and is in contrast with the results for other countries.

Journal

Journal of Business Cycle ResearchSpringer Journals

Published: Jul 24, 2018

There are no references for this article.