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A Monthly Business Cycle Indicator for Ireland

Author

Listed:
  • Conefrey, Thomas

    (Central Bank of Ireland)

  • Liebermann, Joelle

    (Central Bank of Ireland)

Abstract

This Letter describes the construction of a new monthly business cycle indicator of the Irish economy. The index of economic activity draws information from a range categories of data covering output, income, employment, external demand and credit. A statistical method is used to extract a single factor from this panel of variables which is common to each of the series and explains most of the variation across all the data. The index captures the steep decline in economic activity at the height of the financial crisis and the recovery which has taken place since 2010. The weak external environment and subdued domestic demand since the beginning of 2013 is reflected in a decline in the index over recent months. The coincident indicator can be updated regularly to provide analysts and policymakers with a timely assessment of the current state of the economy.

Suggested Citation

  • Conefrey, Thomas & Liebermann, Joelle, 2013. "A Monthly Business Cycle Indicator for Ireland," Economic Letters 03/EL/13, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:03/el/13
    as

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    File URL: https://centralbank.ie/docs/default-source/publications/economic-letters/economic-letter---vol-2013-no-3.pdf?sfvrsn=10
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    References listed on IDEAS

    as
    1. Roberto S. Mariano & Yasutomo Murasawa, 2003. "A new coincident index of business cycles based on monthly and quarterly series," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(4), pages 427-443.
    2. Giannone, Domenico & Reichlin, Lucrezia & Small, David, 2008. "Nowcasting: The real-time informational content of macroeconomic data," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 665-676, May.
    3. Liebermann, Joëlle, 2012. "Short-term forecasting of quarterly gross domestic product growth," Quarterly Bulletin Articles, Central Bank of Ireland, pages 74-84, February.
    4. Doz, Catherine & Giannone, Domenico & Reichlin, Lucrezia, 2011. "A two-step estimator for large approximate dynamic factor models based on Kalman filtering," Journal of Econometrics, Elsevier, vol. 164(1), pages 188-205, September.
    5. repec:hal:journl:peer-00844811 is not listed on IDEAS
    6. Filippo Altissimo & Riccardo Cristadoro & Mario Forni & Marco Lippi & Giovanni Veronese, 2010. "New Eurocoin: Tracking Economic Growth in Real Time," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 1024-1034, November.
    7. Antonello D'Agostino & Kieran McQuinn & Derry O’Brien, 2012. "Nowcasting Irish GDP," OECD Journal: Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2012(2), pages 21-31.
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    Cited by:

    1. Conefrey, Thomas & Walsh, Graeme, 2018. "A Monthly Indicator of Economic Activity for Ireland," Economic Letters 14/EL/18, Central Bank of Ireland.

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