DOI: http://doi.org/10.15350/24097616.2019.5.34

Natalia A. Nevskaya – Candidate of economics sciences, associate professor, leading researcher of the department of economic research Institute of Europe of RAS, Moscow, Russian Federation, ORCID:0000-0002-2344-0549, E-mail: nnevskaya@gmail.com

Abstract. The subject and purpose of the article. The article describe the transformation of the indexes economic theory about calculations of leading composite indexes based on the business cycle and growth cycle data of economies of developed countries. The aim of the article is to consider the main approaches to the formation of tools for assessing business cycle and growth cycle based on a modern theory of economics and a mathematical method. Methods and methodology. The work uses a system method, analysis and synthesis. The article presents a retrospective analysis to the combination of component indicators to the composite indexes and methods for converting them into leading and coincident indexes. Results. The article discusses the main types of indexes currently used in developed Western countries, provides an overview of approaches to the formation of leading and coincident indexes, and examines the dynamics of the main leading indexes in developed countries. Based on the experience of large corporations assessing the dynamics of the business cycle, the main types of composite leading indexes were identified and real estimated indicators in conjunction with the territory were considered, in particular, the Eurozone was taken for consideration. The evolution of approaches to the formation of indexes and the inclusion of a number of indicators in the assessment is considered.  Application area. The paper considers the use of index indicators in the framework of the global assessment of the economic situation and a regional assessment for a number of parameters. Conclusions. The system of leading indexes has a deep study at the level of economic theory and mathematical methods. The analysis of composite leading indexes and indicators wish the assessment suggested say that applicability of this system should be tuned to certain territorial and economic conditions of management. The main indicators forming the index with the basic values should be added a domestic factors makes the development of the economy of the region and the country.

Keywords: economic indicators, coincident indicators, leading indicators, composite indicators, Gross domestic product (GDP), EU country.

References:

1. Altissimo F., Cristadoro R., Forni M., Lippi M. and Veronese G. (2007) New Eurocoin: Tracking economic growth in real time, Temi di discussion del Servizio Studi. Number 631 – June 2007 – Available at: URL: https://www.bancaditalia.it/pubblicazioni/temi-discussione/2007/2007-0631/en_tema_631.pdf (accessed 11 November 2019)
2. Artis M.J., Kontolemis Z.G., Osborn D. R. Business Cycles for G7 and European Countries. The Journal of Business, 1997, vol. 70, issue 2, pp. 249-279 DOI: https://doi:10.1086/209717
3. Billio M., Ferrara L., Guégan D., Mazzi G.L. Evaluation of Regime Switching Models for Real-Time Business Cycle Analysis of the Euro Area. Journal of Forecasting, 2013, vol. 32, issue 7, pp. 577-586. DOI: https://doi.org/10.1002/for.2260
4. Boldin M.D. Dating Turning Points in the Business Cycle. Journal of Business, 1994, vol. 67, issue 1. pp. 97-131. DOI: https://doi.org/10.1086/209717
5. Burns A. F., and Mitchell W. C. Measuring business cycles. New York. NBER. ISBN: 0-870-14085-X. 1946– Available at: URL: https://www.nber.org/books/burn46-1 (accessed 11 November 2019)
6. Buss, G. Tracking economic activity in the euro area: Multivariate direct filter approach. Journal of Business Cycle Measurement and Analysis, 2015, vol. 2014. issue 2, pp. 5 – 25. DOI:  https://doi.org/10.1787/jbcma-2014-5js0bcts1433
7. Camacho M., Perez-Quiros G. Introducing the EURO-STING: Short Term Indicator of Euro Area Growth. Journal of Applied Econometrics, 2010, vol. 25, issue 4. Special Issue Article ‐ Forecast Uncertainty in Macroeconomics and Finance. DOI: https://doi.org/10.1002/jae.1174
8. Carriero A, Marcellino M., Mazzi G.L. Definitions and Taxonomy of indicators. Luxembourg, Publications Office of the European Union Publ., 2017. Available at:  URL: https://ec.europa.eu/eurostat/documents/3859598/8232150/KS-GQ-17-003-EN-N.pdf (accessed 11 November 2019)
9. El Gibari, S., Gómez, T., Ruiz, F. Building composite indicators using multicriteria methods: a review. Journal of Business Economics, 2019, vol. 89, issue 1, pp. 1 – 24. DOI: https://doi.org/10.1007/s11573-018-0902-z
10. Handbook on Cyclical Composite Indicators for business cycle analysis in collaboration with The Conference board, INC. 2017 edition. Available at: URL: https://www.conference-board.org/pdfdownload.cfm?masterProductID=5922 (accessed 11 November 2019)
11. Klein P. A., Moore G. H. Monitoring growth cycles in market-oriented countries: Developing and using international economic indicators. Cambridge, Mass.Ballinger for NBER. 1985. Available at: URL: https://www.nber.org/books/klei85-1 (accessed 11 November 2019)
12. Kozyr N.S. Petrovskaya N.E., Zazimko V.L. Modern approaches assessing global competitiveness. European Research Studies Journal, 2018, vol. XXI, issue 2, pp. 1034-1041. . DOI: 35808/ersj/1355
13. Levanon G., Manini J-C., Ozyildirim A., Schaitkin B., Tanchua J. Using a Leading Credit Index to Predict Turning Points in the U.S. Business Cycle. The Conference Board December 2011. DOI: http://dx.doi.org/10.2139/ssrn.1979777
14. Main Economic Indicators, vol. 2019, issue 11. OECD DOI: https://doi.org/10.1787/mei-v2019-11-en
15. Marcellino M., Stock J.H., Watson M.W. Macroeconomic forecasting in the Euro area: country specific versus Euro wide information. European Economic Review, 2003, vol. 47. issue 1, pp. 1-18.
16. Mintz, I. Dating postwar business cycles: Methods and their application to western Germany, 1950-67, Occasional Paper no. 107, New York, NBER Publ., 1969.
17. Mintz, I. Dating American growth cycles. NBER Chapters, in: Economic Research: Retrospect and Prospect, The Business Cycle Today he business cycle today. New York, NBER Publ., 1972, vol. 1, pp. 39-88
18. Mitchell W. C. Business Cycles: The Problem and Its Setting. New York, NBER Publ.,
19. Qin D. Econometric Study of Business Cycles in the History of Economics. Working paper No. 669. July 2010. Available at: URL: https://www.qmul.ac.uk/sef/media/econ/ research/workingpapers/archive/wp669.pdf (accessed 11 November 2019)
20. Sichel D. Business Cycle Duration Dependence: A Parametric Approach. The Review of Economics and Statistics, 1991, vol. 73, no. 2, pp. 254-260. DOI: 2307/2109515
21. Sichel D. Inventories and the Three Phases of the Business Cycle. Journal of Business and Economic Statistics, 1994, vol. 12, issue 3, pp. 269-277 DOI: https://10.1080/07350015.1994.10524542
22. The Conference Board Global Economic Outlook 2020 – Available at:  URL: https://www.conference-board.org/data/globaloutlook/ (accessed 11 November 2019)
23. Zarnowitz V., Ozyildirim A. Time series decomposition and measurement of business cycles, trends and growth cycles. Journal of Monetary Economics, 2006, vol. 53, issue 7, pp. 1717-1739.  DOI: https://doi.org/10.1016/j.jmoneco.2005.03.015
24. Evseev V.O., Osadchaya G.I., Seleznev I.A. The use of expert systems for assessing integration processes. CITISE, 2019, no 2 (19), p. 16. (In Russian) URL:https://elibrary.ru/item.asp?id=38505986
25. Evseev V.O. Methodology for managing the development of economic competencies. CITISE, 2018, no. 3 (16), p. 13. (In Russian) URL: https://elibrary.ru/item.asp?id=36663892
26. Nevskaya N.A. Macroeconomic forecasting model in the UN LINK project. Economics and Entrepreneurship, 2014, no. 11, pp. 10-14 (In Russian) URL: https://elibrary.ru/item.asp?id=22490734
27. Nevskaya N.A. Leading Economic Index in Euro Area Business Cycle. Sustainable Development Economics, 2019, no 4 (40). (In Russian) URL: https://elibrary.ru/title_about.asp?id=32308

For citation:

Nevskaya N.A. Modern theory of leading composite indexes in the business cycle and the economic growth cycle. CITISE, 2019, no. 5, pp. 373-386. DOI: http://doi.org/10.15350/24097616.019.5.34