A Coincident Index for the State of the Economy

Abstract

In this paper, a methodology is developed for designing a coincident index for the so-called state of the economy. Based on this index, statistical tests are deduced for checking structural changes in the economy and consistency of pre-established economic goals for the short term with past and present observed information. The approach can also be considered as a new solution for the ex post (benchmarking, disaggregation) and ex ante (extrapolation) prediction problems.