Measuring Business Cycle Fluctuations: An Alternative Precursor To Economic Crises

Puah, Chin Hong and Shazali, Abu Mansor and Liew, Venus Khim-Sen and Wong, Shirly Siew-Ling (2016) Measuring Business Cycle Fluctuations: An Alternative Precursor To Economic Crises. Economic Computation and Economic Cybernetics Studies and Research, 50 (4). ISSN 1842–3264

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This study constructs a factor-based model of business cycle identification for the Malaysian economy via the dynamic factor approach. Our central focus is to explore a factor-based business cycle indicator (BCI) that can serve as a good gauge for economic crises. The empirical finding is in harmony with the envisaged objective; the constructed BCI produces satisfactory identification of business cycle turning points and statistically outperforms the national-owned composite leading indicator (CLI) in terms of predictive accuracy and forecasting performance. Therefore, we reckon that the constructed BCI can serve to identify the business climate and foretell approaching economic crises in a timely manner.

Item Type: Article
Uncontrolled Keywords: Business cycle indicator, dynamic factor model, turning points, forecasting, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HB Economic Theory
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 19 Jul 2017 06:39
Last Modified: 19 Jul 2017 06:39

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