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The Ifo Business Cycle Clock: Circular Correlation with the Real GDP

Author

Listed:
  • Klaus Abberger
  • Wolfgang Nierhaus

    ()

Abstract

The Ifo Business Climate is the most important indicator for the business cycle in Germany. In 1993 the connection between the two components of the business climate – business situation and business expectations – was graphically portrayed by Ifo in a 4-quadrant scheme: the Ifo Business Cycle Clock. Today similar monitoring systems are firmly established and are presented by Eurostat, the OECD and others. The German Federal Statistical Office presents the real GDP in a 4-quadrant scheme. In the following, important qualities of the Ifo Business Cycle Clock are shown. The importance of orthogonal functions for the circular correlation is examined.

Suggested Citation

  • Klaus Abberger & Wolfgang Nierhaus, 2010. "The Ifo Business Cycle Clock: Circular Correlation with the Real GDP," CESifo Working Paper Series 3179, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3179
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp3179.pdf
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    References listed on IDEAS

    as
    1. Klaus Abberger & Wolfgang Nierhaus, 2009. "Months for Cyclical Dominance und ifo Geschäftsklima," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 62(07), pages 11-19, April.
    2. repec:ces:ifosdt:v::y:2009:i::p:34-41 is not listed on IDEAS
    3. Klaus Abberger & Wolfgang Nierhaus, 2008. "Die ifo Konjunkturuhr: Ein Präzisionswerk zur Analyse der Wirtschaft," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(23), pages 16-24, December.
    4. Klaus Abberger & Wolfgang Nierhaus, 2008. "How to Define a Recession?," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(4), pages 74-76, December.
    5. Klaus Abberger & Wolfgang Nierhaus, 2010. "Markov-Switching and the Ifo Business Climate: the Ifo Business Cycle Traffic Lights," OECD Journal: Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2010(2), pages 1-13.
    6. Geoffrey H. Moore & Julius Shiskin, 1967. "Indicators of Business Expansions and Contractions," NBER Books, National Bureau of Economic Research, Inc, number moor67-2, January.
    7. Klaus Abberger & Wolfgang Nierhaus, 2007. "Das ifo Geschäftsklima: Ein zuverlässiger Frühindikator," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(05), pages 25-30, March.
    8. Canova, Fabio, 1998. "Detrending and business cycle facts," Journal of Monetary Economics, Elsevier, vol. 41(3), pages 475-512, May.
    9. Wolfgang Nierhaus & Willi Leibfritz, 1993. "Westdeutsche Wirtschaft : wie tief ist die Rezession?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 46(07), pages 10-15, October.
    10. Litterman, Robert B, 1983. "A Random Walk, Markov Model for the Distribution of Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 169-173, April.
    11. Klaus Abberger & Klaus Wohlrabe, 2006. "Einige Prognoseeigenschaften des ifo Geschäftsklimas - Ein Überblick über die neuere wissenschaftliche Literatur," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(22), pages 19-26, November.
    12. Klaus Abberger & Manuel Birnbrich & Christian Seiler, 2009. "Der »Test des Tests« im Handel – eine Metaumfrage zum ifo Konjunkturtest," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 62(21), pages 34-41, November.
    13. Klaus Abberger & Wolfgang Nierhaus, 2010. "Die ifo Konjunkturuhr: Zirkulare Korrelation mit dem Bruttoinlandsprodukt," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 63(05), pages 32-43, March.
    14. Litterman, Robert B, 1983. "A Random Walk, Markov Model for the Distribution of Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 169-173, April.
    15. 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, January.
    16. Zarnowitz, Victor, 1992. "Business Cycles," National Bureau of Economic Research Books, University of Chicago Press, number 9780226978901.
    17. Klaus Abberger, 2006. "Another Look at the Ifo Business Cycle Clock," Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2005(3), pages 431-443.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Ifo business climate; growth cycle; circular correlation; linear-circular correlation; temporal disaggregation;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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