Business Confidence and Cyclical Turning Points: A Markov-Switching Approach
Markov regime-switching analysis is used to consider the relationship between business confidence and the probability of turning points in cyclical GDP. We find, in an application to New Zealand, that confidence is related to both the deepness and duration of the business cycle and is asymmetric regarding the probability of the economy remaining in a given regime. Overall, the New Zealand business confidence series is a useful indicator of cyclical turning points.
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- Michael Massmann & James Mitchell & Martin Weale, 2003. "Business Cycles and Turning Points: A Survey of Statistical Techniques," National Institute Economic Review, National Institute of Economic and Social Research, vol. 183(1), pages 90-106, January.
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