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Indicators of Economic Activity: A Review

Author

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  • Malcolm Edey

    (Reserve Bank of Australia)

  • Jill Pleban

    (Reserve Bank of Australia)

Abstract

This paper reviews the performance of a selection of indicators that are in common use in analysing the business cycle. The analysis proceeds in two stages, looking first at relationships between major expenditure aggregates and GDP, and then looking at the extent to which partial indicators contain useful leading information about particular expenditure aggregates. Results on the first issue show a tendency for housing activity to lead the cycle, while construction and consumption expenditure probably lag. However, these relationships are not very reliable, in the sense that timing can vary significantly from cycle to cycle. On the second issue, the usefulness of a number of partial indicators is confirmed. The most significant in providing leading information are probably local government building approvals and the ANZ job vacancies series.

Suggested Citation

  • Malcolm Edey & Jill Pleban, 1991. "Indicators of Economic Activity: A Review," RBA Research Discussion Papers rdp9102, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp9102
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    File URL: https://www.rba.gov.au/publications/rdp/1991/pdf/rdp9102.pdf
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    References listed on IDEAS

    as
    1. Robert G. Trevor & Stephen G. Donald, 1986. "Leading Indexes – Do They?," RBA Research Discussion Papers rdp8604, Reserve Bank of Australia.
    2. Thornton, Daniel L & Batten, Dallas S, 1985. "Lag-Length Selection and Tests of Granger Causality between Money and Income," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(2), pages 164-178, May.
    3. Paul Brennan & Tania Milavec, 1988. "The Relationship between Actual Investment and Survey-based Expectations," RBA Research Discussion Papers rdp8810, Reserve Bank of Australia.
    4. Glenn Stevens & Susan Thorp, 1989. "The Relationship between Financial Indicators and Economic Activity: Some Further Evidence," RBA Research Discussion Papers rdp8903, Reserve Bank of Australia.
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    Cited by:

    1. J.D. Hollingworth, 1997. "Leading Indicators of Australian Recessions: Part 2," Economics Discussion / Working Papers 97-17, The University of Western Australia, Department of Economics.
    2. C. O'Sullivan, 1993. "What Everyone Needs to Know About the Australian Business Cycle," Economics Discussion / Working Papers 93-21, The University of Western Australia, Department of Economics.

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