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Early warning indicator of economic vulnerability

Author

Listed:
  • Wong, Shirly Siew-Ling
  • Puah, Chin-Hong
  • Abu Mansor, Shazali
  • Liew, Venus Khim-Sen
Abstract
The initiative to capture the information content behind the rise and fall of the business cycle has popularized the study of leading indicators. Many of the foreign experiences shared by economically advanced countries reveal that the leading indicator approach works well as a short-term forecasting tool. Thus, exploring an indicator-based forecasting tool for business cycle analysis and economic risk monitoring would provide insight into the Malaysian economy as well as that of other emerging countries. By extending the ideology of indicator construction from the US National Bureau of Economic Research (NBER), the present study demonstrated the strong potential of the leading indicator approach to be a good gauge of the business cycle movement in addition to being a practical and functional early warning indicator for economic vulnerability prediction.

Suggested Citation

  • Wong, Shirly Siew-Ling & Puah, Chin-Hong & Abu Mansor, Shazali & Liew, Venus Khim-Sen, 2012. "Early warning indicator of economic vulnerability," MPRA Paper 39944, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39944
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    File URL: https://mpra.ub.uni-muenchen.de/39944/1/MPRA_paper_39944.pdf
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    References listed on IDEAS

    as
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    6. Herrara, Santiago & Garcia, Conrado, 1999. "User's guide to an early warning system for macroeconomic vulnerability in Latin American countries," Policy Research Working Paper Series 2233, The World Bank.
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    Cited by:

    1. Venus Khim-Sen Liew & Racquel Anak Rowland & Puah Chin Hong & Jerome Kueh Swee Hui & Rossazana Bt Ab Rahim & Shirly Wong Siew Ling, 2018. "Macroeconomic Instability Index and Malaysia Economic Performance," International Business Research, Canadian Center of Science and Education, vol. 11(3), pages 179-185, March.
    2. Mei-Teing Chong & Chin-Hong Puah & Shazali Abu Mansor, 2018. "Oil Price Dynamics Forecasting: An Indicator-Pivoted Paradigm," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 307-311.
    3. Soh, Ann-Ni, 2020. "A Review on the Leading Indicator Approach towards Economic Forecasting," MPRA Paper 103854, University Library of Munich, Germany.
    4. Chin-Hong Puah, & Tai-Hock Kuek, & M. Affendy Arip,, 2017. "Assessing Thailand’s financial vulnerability: An early warning approach," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(4), pages 496-505, October.
    5. Mei-Teing Chong & Chin-Hong Puah & Shazali Abu Mansor, 2018. "Constructing a Composite Leading Indicator for the Global Crude Oil Price," International Business Research, Canadian Center of Science and Education, vol. 11(5), pages 129-134, May.
    6. Ann-Ni Soh & Chin-Hong Puah & M. Affendy Arip, 2019. "Forecasting Tourism Demand with Composite Indicator Approach for Fiji," Business and Economic Research, Macrothink Institute, vol. 9(4), pages 12-22, December.

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    More about this item

    Keywords

    Business Cycle; Composite Leading Indicator; Early Warning Indicator;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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