A0854
Title: Combining composite indicators and advanced graphical tools for monitoring Euro area and member states cycles
Authors: Gian Luigi Mazzi - Independent Expert (Luxembourg) [presenting]
Jacques Anas - Analysing Cycles in Economies (France)
Monica Billio - University of Venice (Italy)
Ludovic Cales - Hendyplan (Luxembourg)
Abstract: Since several years, Eurostat is monitoring the cyclical situation of the Euro area and its largest economies by means of cyclical composite indicators. Such indicators based on MS-VAR models aim to simultaneously detect peaks and troughs of the growth and business cycles within the so-called ABCD sequence. Furthermore, at the Euro area level, also the acceleration cycle is monitored by means of a univariate MS model. Firstly we present the preliminary results of a project targeting a full coverage monitoring of the Euro area cycles, obtained by developing composite indicators, similar to those already in use, to all Euro area member countries plus the UK. Problems encountered in constructing such indicators, especially due to data availability, are analysed and related solutions are presented. Secondly we show how the results of the cyclical composite indicators can be presented in an intuitive, easy to read and friendly graphical representation. The core of such a graphical tool is constituted by a clockwise representation of the cyclical fluctuations. The characteristics of the tool are presented and some examples are proposed to show the potentials of the tool from the analysts' point of view.
