A World Trade Leading Index (WTLI)
January 26, 2015
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Summary
This paper develops a new monthly World Trade Leading Indicator (WTLI) that relies on nonparametric and parametric approaches. Compared to the CPB World Trade Monitor’s benchmark indicator for global trade the WTLI captures turning points in global trade with an average lead between 2 and 3 months. We also show that this cyclical indicator is able to track the annual growth rate in global trade, suggesting that the recent slowdown is due in part to certain cyclical factors. This new tool can provide policy makers with valuable foresight into the future direction of economic activity by tracking world trade more efficiently.
Subject: Business cycles, Cyclical indicators, Economic growth
Keywords: Business cycles, CPB index, Cyclical indicators, factor models., Global, growth rate, index tracks trade cycles, leading indicators, World trade, World Trade Leading Index factor, WP, WTLI version
Pages:
14
Volume:
2015
DOI:
Issue:
020
Series:
Working Paper No. 2015/020
Stock No:
WPIEA2015020
ISBN:
9781498307543
ISSN:
1018-5941
