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Composite Coincident Indicator of the Czech Business Cycle
[Kompozitný súbežný indikátor hospodárskeho cyklu českej ekonomiky]

Author

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  • Andrea Tkáčová

Abstract

This article's objective is to create the Composite Coincident Indicator - CCI for the Czech economy, which is useful for monitoring of the Czech business cycle and its comparison with the GDP and the Index of Industrial Production. In the theoretical part of this article, we describe three indexes which currently represent options for monitoring of business cycles. The most useful indexes are the GDP, the Index of Industrial Production and the CCI. We also compare advantages and disadvantages of these indexes for the Czech business cycle. In the empirical part of the article, we analyse 127 indicators from different parts of economics and select coincident cyclic indicators that are the most appropriate for the creation of the CCI. The most useful methods in our analysis are Hodrick-Prescott filter and cross-correlations. Besides the creation of our own CCI, we compare this composite indicator with the GDP and the Index of Industrial Production. Then we analyse prediction abilities of Composite Leading Indicators (CLI) in a relationship with the CCI, GDP and Index of Industrial Production for the Czech economy.

Suggested Citation

  • Andrea Tkáčová, 2014. "Composite Coincident Indicator of the Czech Business Cycle [Kompozitný súbežný indikátor hospodárskeho cyklu českej ekonomiky]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2014(3), pages 45-60.
    • Handle: RePEc:prg:jnlaop:v:2014:y:2014:i:3:id:436:p:45-60
    DOI: 10.18267/j.aop.436
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    References listed on IDEAS

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    1. Ataman Ozyildirim & Brian Schaitkin & Victor Zarnowitz, 2010. "Business cycles in the euro area defined with coincident economic indicators and predicted with leading economic indicators," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 29(1-2), pages 6-28.
    2. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1, January.
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    More about this item

    Keywords

    business cycle; composite coincident indicator; GDP; index of industrial production;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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