IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

A Brand New CROLEI: Do We Need a New Forecasting Index?

  • Katarina Bacic

    (Institute of Economics, Zagreb)

  • Maruska Vizek

    (Institute of Economics, Zagreb)

The aim of this paper is to determine whether the existing leading indicators system CROLEI (CROatian Leading Economic Indicators) and its derivative, the CROLEI forecasting index, predict overall Croatian economic activity reliably. The need to evaluate the CROLEI system and the index stems from the modification of the barometric method on which the system and the index are founded on in its application in Croatia. The evaluation of the forecasting power involved the construction of six alternative forecasting indices, which not only challenge the original CROLEI index, but also enable comparisons of forecasting power. The construction of the alternative forecasting indices is also based on the barometric method. The authors then proceed to adjust more complex measurements i.e. forecasting power evaluation matrix, in order to obtain credible forecasting power estimates. Forecasting power is also estimated using two regression models that allow for the forecasting of reference series and yield measurements of forecasting power. The results of both approaches indicate not only that the original CROLEI has by far the greatest forecasting power, but also that it is able to predict the turning points in the economic cycle with the highest probability.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Institute of Public Finance in its journal Financial Theory and Practice.

Volume (Year): 30 (2006)
Issue (Month): 4 ()
Pages: 311-346

in new window

Handle: RePEc:ipf:finteo:v:30:y:2006:i:4:p:311-346
Contact details of provider: Postal: Smiciklasova 21, 10000 Zagreb
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Reinhart, Carmen & Kaminsky, Graciela & Lizondo, Saul, 1998. "Leading Indicators of Currency Crises," MPRA Paper 6981, University Library of Munich, Germany.
  2. Sander, Harald & Kleimeier, Stefanie, 2003. "Contagion and causality: an empirical investigation of four Asian crisis episodes," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 13(2), pages 171-186, April.
  3. Rousseau, Peter L. & Vuthipadadorn, Dadanee, 2005. "Finance, investment, and growth: Time series evidence from 10 Asian economies," Journal of Macroeconomics, Elsevier, vol. 27(1), pages 87-106, March.
  4. Christian Dreger & Christian Schumacher, 2005. "Out-of-sample Performance of Leading Indicators for the German Business Cycle: Single vs. Combined Forecasts," Journal of Business Cycle Measurement and Analysis, OECD Publishing,Centre for International Research on Economic Tendency Surveys, vol. 2005(1), pages 71-87.
  5. Victor Zarnowitz, 1992. "Business Cycles: Theory, History, Indicators, and Forecasting," NBER Books, National Bureau of Economic Research, Inc, number zarn92-1, December.
  6. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ipf:finteo:v:30:y:2006:i:4:p:311-346. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Fabris)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.