Design of a leading indicator for Costa Rican economic activity

• Main Authors: Carlos Chaverri Morales, Diana Van Patten Rivera
• Format: Article
• Language: English
• Published: Universidad Nacional, Costa Rica 2014-08-01
• Series: Economía y Sociedad
• Subjects: Modelos de series temporales; fluctuaciones; ciclos económicos
• Online Access: http://www.revistas.una.ac.cr/index.php/economia/article/view/6426
• ISSN: 1409-1070; 2215-3403

<p>This paper presents the results of estimating three leading indicators for the turning points of the economic activity in Costa Rica. This was done following the methodology proposed by the Organization for Economic Cooperation and Development (OECD). The Monthly Economic Activity Index (IMAE in Spanish) was selected as the reference variable.  A total of 270 data series were analyzed including monetary, real and job market variables, as well as price indices, external sector indicators and fiscal sector variables. The real sector information was disaggregated into three levels, which included the classification of data at an industrial level using the International Standard Industrial Classification (ISIC) with two digits, information from the agricultural sector based on the Central Product Classification (CPC) and information from the manufacturing sector.  A leading indicator was developed for each level of aggregation, resulting in average leads of 7 to 12 months compared to the reference variable.</p>