High frequency economic indicators, such as industrial production or retail sales, are weakly correlated with the real gross domestic product (GDP) in North Macedonia. This makes tracking real activity in real time a challenging task. However, quarterly GDP growth may be decomposed into two important components: a fundamental economic signal and a random noise (a measurement error). A methodology discussed in this paper proposes to extract the economic signal that is highly correlated with a number of available high frequency indicators. The presented methodology may be used both as a nowcasting tool and also for construction of a monthly coincident economic indicator for North Macedonia.
Board Meeting Date
High Frequency Indicators and Tracking Real Activity in North Macedonia
- See More
Rel. Proj ID
MK-North Macedonia Crisis Response -- P175415
Official version of document (may contain signatures, etc)
High Frequency Indicators and Tracking Real Activity in North Macedonia (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/099200112162179414/P1754150f6983d0f082ab0c5c01a2a6566