International Interdependence of Business Cycles: The Use of Leading Indicators for Forecasing and Analysis

  • Jan Marc Berk
Chapter
Part of the Financial and Monetary Policy Studies book series (FMPS, volume 35)

Abstract

One of the most striking aspects of the business cycle is that it is a phenomenon which, sooner or later, is reflected in similar patterns in almost every macroeconomic variable, thus illustrating their interdependence. Such interdependence is not restricted to national macroeconomic variables either; it is also a global phenomenon. The world’s economies are strongly integrated. At a national level, the cyclical movements of some economic variables are known to begin earlier than most of the others, because these variables themselves cause the economic tide to turn, or because they detect the ebb and flow at an early stage, or because they are quick to respond to other leading time series. Similarly, at an international level, it is known that the business cycle of some countries leads that of others, implying that the leading country acts as the engine of growth.

Keywords

Root Mean Square Error Business Cycle Composite Indicator Cyclical Pattern Basic Indicator 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. 2.
    Although heuristic by nature, Census X-11 is not entirely without a theoretical foundation. It can be shown that, in its reduced form, Census X-11 is based on a (close approximation of a) special case of a structural time series model (Den Butter and Mourik, 1990).Google Scholar
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Copyright information

© Springer Science+Business Media Dordrecht 2001

Authors and Affiliations

  • Jan Marc Berk
    • 1
    • 2
  1. 1.De Nederlandsche BankAmsterdamThe Netherlands
  2. 2.Free UniversityAmsterdamThe Netherlands

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