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Working paper

Development Of Composite Indicators Of Cyclical Response In Business Surveys Considering The Specifics Of The ‘Covid-19 Economy’

The article proposes a new set of composite indicators-predictors in business tendency surveys, which allow identifying early information signals of a cyclical nature in the economic behaviour of business agents. The main criterion for the efficiency of such indicators is their sensitivity to a cyclical pattern and changes in the dynamics of statistical referents. Statistically significant lead in time series or earlier publication allows them to be combined into a group of early response indicators. The composite Business Activity Indicator (BAI) in the basic sectors of the Russian economy reflects the ‘common’ profile in the dynamics of short-term fluctuations of the key parameters of the economic environment. It consists of the ‘balances of opinions’ of respondents on questions, which are unified for all sectoral surveys, and connected with reference quantitative statistics with significant cross-correlation coefficients and a lead of at least one quarter. This is its main difference from the well-known indices of economic sentiment and entrepreneurial confidence. The components of the BAI are the new composite indices of real demand, current output, real employment, total profits and general economic situation. The Economic Vulnerability Indicator demonstrates a counter directional profile and various symmetries of its dynamics relative to the short-term movement of the BAI. Proactive monitoring of emerging vulnerabilities in the business environment is necessary to warn of their large-scale accumulation, prevent the risks of economic downturns and ensure the highest possible macroeconomic stability. This integrated approach determines the novelty of the proposed measures of short-term cyclical fluctuations in economic development.