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Predicting Indian Business Cycles: Leading Indices for External and Domestic Sectors

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  • Pami Dua

Abstract

This paper evaluates the real-time performance of the growth rate of the DSE-ECRI Indian leading index for exports for predicting cyclical downturns and upturns in the growth rate of Indian exports. The index comprises the 36-country real effective exchange rate and leading indices of India’s 17 major trading partners. Leading indices of India’s major trading partners were developed at the Economic Cycle Research Institute and forecast the onset and end of recessions in overall economic activity in these economies. The results show that the real-time performance of the growth rate of the leading index of Indian exports has been creditable in the last seven years since its construction in 2001. In conjunction with the DSE-ECRI Indian Leading Index, designed to monitor the domestic economy, the exports leading index forms a sound foundation for a pioneering effort to monitor Indian economic cycles.

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  • Pami Dua, 2007. "Predicting Indian Business Cycles: Leading Indices for External and Domestic Sectors," Working Papers id:1144, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:1144
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    1. Geoffrey H. Moore & Julius Shiskin, 1967. "Indicators of Business Expansions and Contractions," NBER Books, National Bureau of Economic Research, Inc, number moor67-2, March.
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    Cited by:

    1. Pami Dua & Divya Tuteja, 2015. "Global Recession and Eurozone Debt Crisis: Impact on Exports of China and India," Working Papers id:7386, eSocialSciences.
    2. Pami Dua & Anirvan Banerji, 2012. "Business And Growth Rate Cycles In India," Working papers 210, Centre for Development Economics, Delhi School of Economics.

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