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How to Suppress a Lead: Comment

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  • Goldrian, Georg

Abstract

According to the findings of Scholer (1994)' the "Business Climate" developed by the ifo Institute for Economic Research, Munich, cannot be used as a leading indicator for business cycle forecast. This paper shows that this result is due to Scholer's choice of statistical methods applied: apart from generating stationary time series, Scholer's filter systematically suppresses the business cycle components and amplifies the irregular components. It impairs the basis for the causality test.

Suggested Citation

  • Goldrian, Georg, 1995. "How to Suppress a Lead: Comment," Empirical Economics, Springer, vol. 20(1), pages 177-181.
    • Handle: RePEc:spr:empeco:v:20:y:1995:i:1:p:177-81
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