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Business Cycle and Early Warning Indicators for the Economy of Hong Kong– Challenges of Forecasting Work amid the COVID-19 Pandemic

Author

Listed:
  • Sharon Pun-wai Ng

    (The Government of the Hong Kong Special Administrative Region of the People’s Republic of China)

  • Eddie Ming-lok Kwok

    (The Government of the Hong Kong Special Administrative Region of the People’s Republic of China)

  • Brian Chi-yan Cheng

    (The Government of the Hong Kong Special Administrative Region of the People’s Republic of China)

  • Alfred Yiu-po Yuen

    (The Government of the Hong Kong Special Administrative Region of the People’s Republic of China)

Abstract

This paper discusses the use of the OECD’s framework to identify early warning indicators for building a Composite Leading Indicator (CLI) and the use of the Vector Autoregressive Model (VAR) for constructing a short-term forecasting model of economic growth of Hong Kong. With the onset of the COVID-19 pandemic, this paper further evaluates the performance of the CLI and forecasting model which were built based on pre-COVID-19 parameters and identify further adjustments to enhance the model performance.

Suggested Citation

  • Sharon Pun-wai Ng & Eddie Ming-lok Kwok & Brian Chi-yan Cheng & Alfred Yiu-po Yuen, 2024. "Business Cycle and Early Warning Indicators for the Economy of Hong Kong– Challenges of Forecasting Work amid the COVID-19 Pandemic," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 20(1), pages 123-135, August.
    • Handle: RePEc:spr:jbuscr:v:20:y:2024:i:1:d:10.1007_s41549-024-00098-4
    DOI: 10.1007/s41549-024-00098-4
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    References listed on IDEAS

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    3. Gerhard Bry & Charlotte Boschan, 1971. "Foreword to "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs"," NBER Chapters, in: Cyclical Analysis of Time Series: Selected Procedures and Computer Programs, pages -1, National Bureau of Economic Research, Inc.
    4. Lahiri, Kajal & Yin, Yimeng, 2024. "Seasonality in U.S. disability applications, labor market, and the pandemic echoes," Labour Economics, Elsevier, vol. 87(C).
    5. Yuichiro Ito & Tomiyuki Kitamura & Koji Nakamura & Takashi Nakazawa, 2014. "New Financial Activity Indexes: Early Warning System for Financial Imbalances in Japan," Bank of Japan Working Paper Series 14-E-7, Bank of Japan.
    6. Gerhard Bry & Charlotte Boschan, 1971. "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs," NBER Books, National Bureau of Economic Research, Inc, number bry_71-1, January.
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    More about this item

    Keywords

    Leading indicators; GDP; Forecasting; Short-term forecast; COVID-19;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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