Inconsistencies in Leading Economic Indicators

At the joint statistical meeting in Vancouver I briefly discussed the Leading Economic Index (LEI) of the conference board with Gian-Luigi Mazzi. As it happens we disagreed on the `meaning' or `interpretability ' of the indicator: I argued that it emphasizes the classical cycle (since it's supp… osed to lead the coincident index: CLI) whereas Gian-Luigi maintained a growth-cycle interpretation (i.e. the cycle in the deviations from trend).

I'd like to show here that we were both right (or false) and that the inconsistency of my present statement  is a consequence of an inconsistent design underlying the LEI.

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