A New Leading Indicator of Economic Activity

BRAZIL ECONOMICS - Report 06 Dec 2013 by Marcelo Gazzano, Cristina Pinotti and Affonso Pastore

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Executive Summary In this report, we present a new leading indicator of economic activity in Brazil. Its most important characteristic is to forecast the turning points of economic cycles. Our methodology follows that of the OECD. In constructing our indicator, we started with 52 candidate variables, of which we selected 11, namely: the industrial confidence indicator, measured by FGV; the price of raw material commodities measured in dollars; the Ibovespa (BM&FBovespa Index); the metals commodity price index measured in dollars; the global PMI; the ISM; the national vehicle production inde...