A Financial Conditions Index for Poland

Author/Editor: Giang Ho ; Yinqiu Lu
Publication Date: December 19, 2013
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Summary: This paper constructs a financial conditions index for Poland to explore the link between financial conditions and real economic activity. The index in constructed by applying two complementary approaches—factor analysis and vector auto-regression approach. We evaluate the index’s forecasting performance against a composite leading indicator developed by the OECD. We found that the FCI is highly correlated with GDP growth, attesting to the importance of financial sector in Poland’s economy. In-sample and out-of-sample forecasting exercises indicate that the FCI can outperform the CLI in predicting near-term GDP growth.
Series: Working Paper No. 13/252
Subject(s): Financial sector | Poland | Economic conditions | Economic models

Publication Date: December 19, 2013
ISBN/ISSN: 9781475540642/1018-5941 Format: Paper
Stock No: WPIEA2013252 Pages: 16
US$18.00 (Academic Rate:
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