Tackling macroeconomic precariousness: The role of the composite leading indicator

• Main Authors: Puah, Chin-Hong, Tan, Wei-tTing, Shazali, Abu Mansor, Wong, Shirly Siew Ling
• Format: E-Article
• Language: English
• Published: International Information Institute Ltd. 2016
• Subjects: HB Economic Theory
• Online Access: http://ir.unimas.my/id/eprint/14085/1/Tackling-macroeconomic-precariousness-The-role-of-the-composite-leading-indicator_2016_Information-%28Japan%29.html; http://ir.unimas.my/id/eprint/14085/; https://www.scopus.com/inward/record.uri?eid=2-s2.0-84984839742&partnerID=40&md5=4480d179b40d4777788354abb3843eef

The present study explored the possibility of extending the leading indicator framework to establish a composite leading indicator (CLI) for the Cambodian economy. We established the CLI on the basis of a non-parametric approach originated by the National Bureau of Economic Research (NBER). We subjected a great number of macroeconomic series to empirical scrutiny and settled on two prominent leading variables that ultimately molded a remarkable CLI that effectively tracked the precarious ebb and flow of the macroeconomic environment in Cambodia. Of note is that an average lead time of 7 months manifested great potential for CLI to evolve as a pragmatic means of near-term forecasting to prefigure the fluctuating business cycle.