WP/10/05 Economic Cycle and Leading Indicators: Methodological Approach and the Possibilities of their Use in Belarus
This paper represents the first attempt to construct and use a composite index of leading indicators for Belarus. Among developed countries, this tool is widely used for the analysis of the current phase of the economic business cycle both by the economic authorities and other economic agents. In addition to the study of the phase of the economic cycle, the use of leading indicators provides unique information: the direction of change in GDP growth in the current period and in the near future. As a rule, leading indicators include indicators that characterize the behavior of households, enterprises of the real sector of the economy, the agents of the external sector in the early stages of the economic and technology cycle. Based on the analysis of the prognostic properties determining the dynamics of the GDP cycle of about 100 variables, we selected 14 variables constructing the composite index of leading indicators for Belarus.