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Development Of Composite Indicators Of Cyclical Response In Business Surveys Considering The Specifics Of The ‘Covid-19 Economy’

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  • Liudmila Kitrar

    (National Research University Higher School of Economics)

  • Tamara Lipkind

    (National Research University Higher School of Economics)

Abstract

The article proposes a new set of composite indicators-predictors in business tendency surveys, which allow identifying early information signals of a cyclical nature in the economic behavior of business agents. The main criterion for the efficiency of such indicators is their sensitivity to a cyclical pattern and changes in the dynamics of statistical referents. Statistically significant lead in time series or earlier publication allows them to be combined into a group of early response indicators. The composite Business Activity Indicator (BAI) in the basic sectors of the Russian economy reflects the ‘common’ profile in the dynamics of short-term fluctuations of the key parameters of the economic environment. It consists of the ‘balances of opinions’ of respondents on questions, which are unified for all sectoral surveys, and connected with reference quantitative statistics with significant cross-correlation coefficients and a lead at least one quarter. This is its main difference from the well-known indices of economic sentiment and entrepreneurial confidence. The components of the BAI are the new composite indices of real demand, current output, real employment, total profits and general economic situation. The Economic Vulnerability Indicator demonstrates a counterdirectional profile and various symmetry of its dynamics relative to the short-term movement of the BAI. Proactive monitoring of emerging vulnerabilities in the business environment is necessary to warn their large-scale accumulation, prevent the risks of economic downturns and ensure the highest possible macroeconomic stability. This integrated approach determines the novelty of the proposed measures of short-term cyclical fluctuations in economic development.

Suggested Citation

  • Liudmila Kitrar & Tamara Lipkind, 2021. "Development Of Composite Indicators Of Cyclical Response In Business Surveys Considering The Specifics Of The ‘Covid-19 Economy’," HSE Working papers WP BRP 121/STI/2021, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:121sti2021
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    More about this item

    Keywords

    business cycles; business surveys; business activity indicator; composite indicators of cyclical response; economic vulnerability indicator; real demand indicator; current output indicator; real employment indicator.;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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