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A composite leading indicator of Australian inflation

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  • Imad Moosa

Abstract

This paper investigates the possibility of constructing a composite leading indicator of Australian inflation. Five variables are considered and found to have both short-run and long-run causal linkages with consumer prices. A composite leading indicator is constructed on the basis of the coefficients of the cointegrating vector and smoothed by calculating a four-quarter moving average. This indicator is shown to have led the annual inflation rate in six troughs and five peaks between 1972 and 1992.

Suggested Citation

  • Imad Moosa, 1998. "A composite leading indicator of Australian inflation," Applied Economics Letters, Taylor & Francis Journals, vol. 5(11), pages 711-713.
    • Handle: RePEc:taf:apeclt:v:5:y:1998:i:11:p:711-713
    DOI: 10.1080/135048598354186
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    1. Mishkin, Frederic S., 1990. "What does the term structure tell us about future inflation?," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 77-95, January.
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