Estimating Indexes of Coincident and Leading Indicators: An Application to Jordan
IMF Working Papers, August 1, 2003
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Bibliographic details
- Authors: Joannes Mongardini, Tahsin Saadi Sedik
- Published: August 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451858440.001
Authors and Publication
- Joannes Mongardini
- Tahsin Saadi Sedik
- August 1, 2003
- IMF Working Papers, Issue: 170
- Series: Working Paper No. 2003/170
- Pages: 32
- Volume: 2003
- DOI: https://doi.org/10.5089/9781451858440.001
- Stock No: WPIEA1702003
- ISBN: 9781451858440
- ISSN: 1018-5941
Research Objective and Scope
- Presents an econometric approach to deriving composite indexes of coincident and leading indicators for a small open economy, Jordan.
- Focuses on short-term direction of economic activity using indicators from different sectors of the economy.
- Addresses challenges stemming from limited historical monthly data in emerging market and developing economies.
Key Findings
- Even with limited monthly observations, it is possible to establish meaningful economic and statistically significant relations between indicators from different sectors and the present and future direction of economic activity.
- The analysis of coincident and leading indicators can help policymakers gauge the short-term direction of economic activity.
- Such analysis is well established in advanced economies but has received relatively little attention in many emerging market and developing economies, reflecting in part the lack of sufficient historical data to determine the reliability of these indicators.
Thematic Coverage and Keywords
- Subject areas: Business cycles, Cyclical indicators, Economic growth, Emerging and frontier financial markets, Financial markets, Industrial production, Production, Production index.
- Keywords include: adjusted leading indicators, Business cycles, coincident indicators, composite index, composite index of leading economic indicators, composite indexes of coincident and leading economic indicators, confidence interval, Cyclical indicators, economic activity, Emerging and frontier financial markets, Global, Industrial production, Jordan, Jordanian dinar, leading indicator, leading indicators, leading indicators of economic activity, OECD methodology, Production index, share price, WP.
Implications for Policymakers and Practitioners
- Composite coincident and leading indicator indexes can be constructed for small open economies like Jordan using econometric techniques even when data length is limited.
- These indexes provide statistically significant signals about current and future economic activity across sectors, informing short-term policy assessment.
Source: IMF Working Paper — "Estimating Indexes of Coincident and Leading Indicators: An Application to Jordan" (Issue 170, 2003).