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A composite leading indicator for a small transition economy: the case of Croatia

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  • Ahec Šonje, Amina
  • Katarina, Bacic

Abstract

This paper provides an overview of application of a modified NBER “leading indicators approach” in Croatia since the mid 1990s. Shortness of time series, which has proven to be the biggest obstacle in applying the original NBER method, was overcome by a modification of a methodological step in the scoring procedure. The main idea behind the first part of the paper is to briefly explain the NBER methodology, with causes of modifications and interventions in the method when it started being applied in Croatia. Then follows an informative outline of the last revision of the CROLEI index from 2004 with the purpose to update the prognostic system and improve the index’s prognostic power. The last part of the paper analyses the movement of the CROLEI index and its prognostic strength with respect to the previous revisions and offers several conclusions.

Suggested Citation

  • Ahec Šonje, Amina & Katarina, Bacic, 2006. "A composite leading indicator for a small transition economy: the case of Croatia," MPRA Paper 83135, University Library of Munich, Germany, revised Apr 2006.
    • Handle: RePEc:pra:mprapa:83135
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    References listed on IDEAS

    as
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    3. Geoffrey H. Moore & Julius Shiskin, 1967. "Indicators of Business Expansions and Contractions," NBER Books, National Bureau of Economic Research, Inc, number moor67-2, July.
    4. Wojciech W. Charemza & Derek F. Deadman, 1992. "New Directions In Econometric Practice," Books, Edward Elgar Publishing, number 84.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Leading indicators approach; the CROLEI index; the NBER method; bivariate Granger causality test; the scoring method;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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