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Current Period Performance of OECD Composite Leading Indicators (CLIs): Revision analysis of CLIs for OECD Member countries

  • Ronny Nilsson
  • Emmanuelle Guidetti
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    This paper presents a comprehensive analysis of the current period performance of the OECD composite leading indicators (CLIs) for 21 OECD Member countries and three zone aggregates (OECD area, Euro area and Major Seven countries) for which CLIs are available for a longer time period. The revisions analysis of OECD CLIs is similar to those recently undertaken by the Organisation for a range of quantitative short-term economic indicators. The aim of the current analysis on CLIs is to further evaluate the quality of the indicator in order to: identify areas where their reliability could be improved; and provide further information to users on their use for economic analyses. The results show that first estimates of CLIs are revised frequently but the size of revisions is rather small for most countries and almost neglectable for zone aggregates and there is no evidence of bias. They also indicate that there is an improvement in the reliability of the second estimates. The OECD CLI is, however, designed to provide early signals of turning points (peaks and troughs) between expansions and slowdowns of economic activity. It provides qualitative information on short-term economic movements rather than quantitative measures. Therefore, the main message of CLI movements over time is the direction up or down rather than levels. A simple measure which considers the direction is the sign of the movements. The results show that for almost all the countries, around 90% of the time the sign of the initial estimates of year-on-year growth rates and the 6 month rate of change are the same as the ones published one month later. So the initial estimate can be considered as a good indicator of whether economic activity will move up or down in the near term future... Ce document présente une analyse détaillée de la performance actuelle des indicateurs composites avancés (CLI) de l’OCDE pour 21 de ses pays membres et pour trois agrégats (total OCDE, la zone Euro et les pays du G7), pour lesquels ces indicateurs sont disponibles sur une longue période. L’analyse des révisions des indicateurs composites avancés de l’OCDE est similaire à celles récemment entreprises par l’Organisation pour un certain nombre d’indicateurs économiques à court terme quantitatifs. Le but de cette présente analyse sur les indicateurs composites avancés est non seulement de faire une évaluation approfondie de leur qualité afin d’en améliorer la fiabilité quand cela s’avère nécessaire ; mais aussi de donner une meilleure information quant à leur utilisation pour des analyses économiques. Les résultats montrent que la première estimation des indicateurs composites avancés est sujette à être fréquemment révisée, mais l’amplitude de ces révisions est relativement petite pour la plupart des pays et presque négligeable pour les agrégats calculés et il n’y a pas d’évidence de biais. Les résultats indiquent aussi une amélioration de la fiabilité de la deuxième estimation (celle publié un mois plus tard). L’indicateur composite avancé de l’OCDE a été, cependant, conçu pour signaler à l’avance les points de retournement (pics et creux) entre les phases d’expansion et de ralentissement de l’activité économique. Il fournit une information qualitative sur les mouvements économiques à court terme plutôt qu’une mesure quantitative. Ainsi, le message principal des mouvements des indicateurs composites avancés à travers le temps est la direction vers le haut ou vers le bas de ces mouvements plutôt que leurs amplitudes. Une mesure simple, qui rend compte de la direction, est le signe des mouvements. Les résultats montrent que pour la plupart des pays, environ 90% du temps, le signe de l’estimation initiale des taux de croissance en glissement annuel et des taux de variation sur 6 mois est similaire au signe de celle publiée un mois plus tard. Par conséquent l’estimation initiale peut être considérée comme étant un bon indicateur quant à la direction que va prendre, dans un futur proche, l’activité économique...

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    File URL: http://dx.doi.org/10.1787/117868214158
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    Paper provided by OECD Publishing in its series OECD Statistics Working Papers with number 2007/1.

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    Date of creation: 11 May 2007
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    Handle: RePEc:oec:stdaaa:2007/1-en
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