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New tools for analyzing the Mexican economy: indexes of coincident and leading economic indicators

Author

Listed:
  • Lucinda Vargas
  • Victor Zarnowitz

    (National Bureau of Economic Research
    Conference Board
    University of Chicago
    ebrary Inc)

  • Keith R. Phillips

Abstract

New composite indexes presented in this article could prove useful in analyzing and forecasting the Mexican economy. Keith Phillips, Lucinda Vargas, and Victor Zarnowitz present composite indexes of leading and coincident indexes for Mexico. In constructing the indexes, the economists use an approach similar to that developed by the National Bureau of Economic Research to create the composite indexes of U.S. economic activity. The authors classify peaks and troughs in the Mexican business cycle since 1980. Using these business cycle turning points, the authors determine which indicators consistently turned down prior to recessions and turned up prior to expansions. Eight of the best performing indicators are combined to create a composite index of leading economic indicators.

Suggested Citation

  • Lucinda Vargas & Victor Zarnowitz & Keith R. Phillips, 1996. "New tools for analyzing the Mexican economy: indexes of coincident and leading economic indicators," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II.
  • Handle: RePEc:fip:fedder:y:1996:i:qii
    as

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    File URL: http://www.dallasfed.org/assets/documents/research/er/1996/er9602a.pdf
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    References listed on IDEAS

    as
    1. Diebold, Francis X & Rudebusch, Glenn D, 1989. "Scoring the Leading Indicators," The Journal of Business, University of Chicago Press, vol. 62(3), pages 369-391, July.
    2. Evan F. Koenig & Kenneth M. Emery, 1994. "Why The Composite Index Of Leading Indicators Does Not Lead," Contemporary Economic Policy, Western Economic Association International, vol. 12(1), pages 52-66, January.
    3. Philip A. Klein & Geoffrey H. Moore, 1985. "Monitoring Growth Cycles in Market-Oriented Countries: Developing and Using International Economic Indicators," NBER Books, National Bureau of Economic Research, Inc, number klei85-1.
    4. Zarnowitz, Victor, 1992. "Business Cycles," National Bureau of Economic Research Books, University of Chicago Press, number 9780226978901, March.
    5. Chow, Gregory C & Lin, An-loh, 1971. "Best Linear Unbiased Interpolation, Distribution, and Extrapolation of Time Series by Related Series," The Review of Economics and Statistics, MIT Press, vol. 53(4), pages 372-375, November.
    6. Koch, Paul D & Rasche, Robert H, 1988. "An Examination of the Commerce Department Leading-Indicator Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(2), pages 167-187, April.
    7. Gerhard Bry & Charlotte Boschan, 1971. "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs," NBER Books, National Bureau of Economic Research, Inc, number bry_71-1.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Cheung, Yin-Wong & Fujii, Eiji, 2000. "Which Measure of Aggregate Output Should We Use?," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 253-269, April.
    2. repec:ebl:ecbull:v:3:y:2007:i:46:p:1-12 is not listed on IDEAS
    3. Keith R. Phillips, 2004. "A new monthly index of the Texas business cycle," Working Papers 0401, Federal Reserve Bank of Dallas.

    More about this item

    Keywords

    Economic indicators; Texas;

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