Daily Archives: Feb 14, 2020 at 07:04 am EST

Research Review | 14 February 2020 | Business Cycle Risk

A New Index of the Business Cycle
William B. Kinlaw (State Street Global Markets), et al.
January 2020
The authors introduce a new index of the business cycle that uses the Mahalanobis distance to measure the statistical similarity of current economic conditions to past episodes of recession and robust growth. Their index has several important features that distinguish it from the Conference Board’s leading, coincident, and lagging indicators. It is efficient because as a single index it conveys reliable information about the path of the business cycle. Their index gives an independent assessment of the state of the economy because it is constructed from variables that are different than those used by the NBER to identify recessions. It is strictly data driven; hence, it is unaffected by human bias or persuasion. It gives an objective assessment of the business cycle because it is expressed in units of statistical likelihood. And it explicitly accounts for the interaction, along with the level, of the economic variables from which it is constructed.
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Macro Briefing | 14 February 2020

Attorney General Barr criticizes Trump for tweets re: Justice Dept: ABC
CDC director: coronavirus is “probably with us beyond this season”: CNN
Tension rising between Turkish and Russian-backed Syrian forces: NBC
Eurozone GDP growth slowed in Q4, weaker than previously estimated: Reuters
Is Europe’s largest economy prepared for trade and coronavirus risks? BBG
US core consumer inflation firmed up in January: CNBC
Gold price edges up as gold-standard advocate’s Fed nomination stumbles: THill