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A review of leading composite indicators: making a case for their use in Caribbean economies

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  • Cotrie, Gladys
  • Craigwell, Roland
  • Maurin, Alain

Abstract

In this article, three issues relating to leading composite indicators (LCI) are discussed: their importance, methods of estimation and uses by institutions worldwide. This discussion is utilised to provide lessons that could be learnt for the application of these indicators to the countries of the Caribbean. The principal message of this material is that in this geographical area, LCI would be important tools for economic decision makers to employ to forecast the future state of the economy. This option should be pursued vigorously by putting the necessary resources into developing the high frequency real sector data that is required for a successful application of the LCI methodology.

Suggested Citation

  • Cotrie, Gladys & Craigwell, Roland & Maurin, Alain, 2009. "A review of leading composite indicators: making a case for their use in Caribbean economies," MPRA Paper 33390, University Library of Munich, Germany, revised 2009.
    • Handle: RePEc:pra:mprapa:33390
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    File URL: https://mpra.ub.uni-muenchen.de/33390/1/MPRA_paper_33390.pdf
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    References listed on IDEAS

    as
    1. Alain Maurin & Gladys Cotrie & Roland Craigwell, 2006. "Estimating Indexes of Coincident and Leading Indicators," EcoMod2006 272100062, EcoMod.
    2. Yanjun Liu & Carl Gaudreault & Robert Lamy, "undated". "New Concident, Leading and Recession Indexes for the Canadian Economy: An Application of the Stock and Watson Methodology," Working Papers-Department of Finance Canada 2003-12, Department of Finance Canada.
    3. Éric Heyer & Hervé Péléraux, 2004. "Un indicateur de croissance infra-annuelle pour l'économie française," Revue de l'OFCE, Presses de Sciences-Po, vol. 88(1), pages 203-218.
    4. James H. Stock & Mark W. Watson, 1989. "New Indexes of Coincident and Leading Economic Indicators," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 351-409, National Bureau of Economic Research, Inc.
    5. Françoise Charpin, 2002. "Un indicateur de croissance à court terme de la zone euro," Revue de l'OFCE, Presses de Sciences-Po, vol. 83(4), pages 229-242.
    6. Vincent Bodart & Fati Shadman-Mehta, 2004. "Prévoir les retournements conjoncturels en Belgique : les nouveaux indicateurs de l’IRES," Regards économiques 26, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Mr. Joannes Mongardini & Tahsin Saadi Sedik, 2003. "Estimating Indexes of Coincident and Leading Indicators: An Application to Jordan," IMF Working Papers 2003/170, International Monetary Fund.
    8. Peter Grasmann & Filip Keereman, 2001. "An indicator-based short-term forecast for quarterly GDP in the euro area," European Economy - Economic Papers 2008 - 2015 154, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    9. James H. Stock & Mark W. Watson, 1993. "A Procedure for Predicting Recessions with Leading Indicators: Econometric Issues and Recent Experience," NBER Chapters, in: Business Cycles, Indicators, and Forecasting, pages 95-156, National Bureau of Economic Research, Inc.
    10. Burkart, Oliver & Coudert, Virginie, 2002. "Leading indicators of currency crises for emerging countries," Emerging Markets Review, Elsevier, vol. 3(2), pages 107-133, June.
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    Cited by:

    1. Gladys COTRIE & Roland CRAIGWELL & Alain MAURIN, 2009. "Estimating Indexes Of Coincident And Leading Indicators For Barbados," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2).

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    More about this item

    Keywords

    Business cycles; Leading indicators;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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