Pe o ska, Magdalena; K s e ska, Ane a; Naumo ski, Nikola
A icle
Fo ecas ing Macedonian Business Cycle Tu ning Poin s
Using Qual Va Model
Jou nal o Cen al Banking Theo y and P ac ice
P o ided in Coope a ion wi h:
Cen al Bank o Mon eneg o, Podgo ica
Sugges ed Ci a ion: Pe o ska, Magdalena; K s e ska, Ane a; Naumo ski, Nikola (2016) : Fo ecas ing
Macedonian Business Cycle Tu ning Poin s Using Qual Va Model, Jou nal o Cen al Banking Theo y
and P ac ice, ISSN 2336-9205, De G uy e Open, Wa saw, Vol. 5, Iss. 3, pp. 61-78,
h ps://doi.o g/10.1515/jcb p-2016-0020
This Ve sion is a ailable a :
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Fo ecas ing Macedonian Business Cycle Tu ning Poin s Using Qual Va Model 61
* Na ional Bank o he Republic
o Macedonia
E-mail:
Pe o skaM@nb m.mk
** Na ional Bank o he Republic
o Macedonia
E-mail:
K s e skaA@nb m.mk
*** Na ional Bank o he Republic
o Macedonia
E-mail:
Naumo skiN@nb m.mk
Jou nal o Cen al Banking Theo y and P ac ice, 2016, 3, pp. 61-78
Recei ed: 6 Ap il 2016; accep ed: 25 July 2016
UDK: 330.1:65.012.511(497.7)
DOI: 10.1515/jcb p-2016-0020
Magdalena Pe o ska *
Ane a K s e ska **
Nikola Naumo ski ***
Fo ecas ing Macedonian Business
Cycle Tu ning Poin s Using Qual
Va Model1
Abs ac : This pape aims a assessing he use ulness o leading in-
dica o s in business cycle esea ch and o ecas . Ini ially we es he
p edic i e powe o he economic sen imen indica o (ESI) wi hin
a s a ic p obi model as a leading indica o , commonly pe cei ed
o be able o p o ide a eliable summa y o he cu en economic
condi ions. We u he p oceed analyzing how well an ex ended se
o indica o s pe o ms in o ecas ing u ning poin s o he Macedo-
nian business cycle by employing he Qual VAR app oach o Dueke
(2005). In con inua ion, we e alua e he quali y o he selec ed indi-
ca o s in pseudo-ou -o -sample con ex . The esul s show ha he
use o su ey-based indica o s as a complemen o mac oeconomic
da a wo k sa is ac o y well in cap u ing he business cycle de elop-
men s in Macedonia.
JEL classi ica ions: F42, C25, C22
Keywo ds: Fo ecas ing, Business cycle u ning poin s, Qual VAR,
MCMC, La en a iable
1 The esponsibili y o his pape lies solely wi h he indi idual au-
ho s. The iews exp essed he ein do no necessa ily ep esen hose
o he Na ional Bank o he Republic o Macedonia.
Jou nal o Cen al Banking Theo y and P ac ice
62
1. In oduc ion
Economic analys s ha e been making g ea e o s o de i e a mix o mac oe-
conomic indica o s ha could summa ize and p edic business cycle pa e ns.
Mo eo e , he p edic ion o business cycle phases is e y challenging gi en ha
luc ua ions in mac oeconomic condi ions a e ne e di ec ly obse able. A good
comp ehension o business cycle ac s is essen ial o mac oeconomic decision-
making, especially in mone a y and iscal policies. The GDP cycle was ex ac ed
using a double Hod ick-P esco (HP) il e . This pa icula app oach wo ks o-
wa ds achie ing g ea e u ning poin s signal s abili y. Fu he mo e, gi en ha
business cycle o ecas ing is he c ea ion o pos ula es abou how a business cycle
will e ol e in he u u e, analys s use a a ie y o economic indica o s o o m he
p edic ions. Fo ins ance, he so called leading indica o s a e a iables ha ha e a
endency o change ahead o he economy as a whole, so hey a e equen ly used
in business cycle o ecas ing. Following his p ac ice, we conside ed employing
he Eu opean Commission’s Economic sen imen indica o (ESI) o Macedonia
in ou analysis. Namely, he ESI as a single a iable e lec ing economic agen s’
sen imen in eg a es mos o he in o ma ion embedded in mul iple indica o s.
We examined he leading p ope y o he ESI ela i e o GDP i s ly by using a
s a ic p obi model. In his ega d, we ind ha he cyclical mo emen o he ESI
is help ul in moni o ing and p edic ing he u ning poin s o GDP.
A la ge and g owing body o esea ch (like o ins ance, on he case o U.S. eces-
sions, he wo k by Kauppi and Saikkonen (2008), Nybe g (2010), and Ng (2012),
among o he s), has demons a ed ha including dynamic elemen s (e.g., lags o
he bina y esponse a iable) in he p obi models can p oduce mo e p ecise o e-
cas s o ecessions han s anda d p obi eg essions. Consequen ly, we ocus on
he Qual VAR me hod o Dueke (2005). One imp o emen ha Dueke con ib-
u es o business cycle u ning poin s o ecas ing li e a u e is ha his au ho ’s
me hod includes a la en a iable unde lying he ecession pe iods along wi h
o he indica o s in a VAR se ing. To his end, good o ecas ing indica o s should
closely ma ch he ola ile economic de elopmen .
Ou Qual VAR model showed ha bo h g ow h a es o eal GDP, as mos na u al
choice, and he ESI alone a e good candida e indica o s, howe e , hey do no
qui e well e lec he ecen Macedonian business cycle his o y. When i comes
o he ESI o he Macedonian economy, we would like o poin ou ha i is
qui e newly publicly a ailable indica o and, o his end, we belie e ha his pa-
pe could con ibu e owa ds enligh ening i s o ecas ing powe in business cycle
analysis. The e o e, we p oceeded wi h addi ional expe imen s ha combine di -
e en inancial and mac oeconomic ac i i y a iables wi h he abo e selec ion
Fo ecas ing Macedonian Business Cycle Tu ning Poin s Using Qual Va Model 63
o da a. A e g ea many such simula ions, we concluded ha ESI along wi h
he eal GDP and he capaci y u iliza ion a e in manu ac u ing (which ypically
climbs when he economy is ib an and alls when demand so ens), can ac ually
smoo hly p edic he Macedonian business cycle luc ua ions. In addi ion, o ou
knowledge, his wo k is be ween he i s pape s on his subjec o he Macedo-
nian economy (aside om business cycle synch oniza ion analysis).
This pape is o ganized as ollows. The nex chap e p o ides li e a u e o e iew,
while chap e 3 e alua es he ESI use ulness in assessing he cu en s a e o he
Macedonian economy. Chap e 4 explains he Qual VAR app oach ha is used
and chap e 5 p o ides he esul s, ollowed by he concluding pa .
2. Li e a u e e iew
The complica ed na u e o business cycle modelling has caused many di icul-
ies in mode n mac oeconomics. Du ing he las decades, esea che s ha e kep
on sea ching o he mos accu a e and eliable economic models o e lec in
a bes way he u u e economic beha iou s. Mos ecession o ecas ing models
use ma hema ical echniques o igina ed om he ec o au o eg ession me hod.
Howe e , a numbe o ecen s udies combine adi ional p obi models and ec-
o au o eg ession models o de elop mo e comp ehensi e dynamic p obi VAR
app oaches.
Dueke (2005) p esen ed a new Qual VAR model by inco po a ing in o ma ion
om quali a i e and/o disc e e a iables in ec o au o eg essions. Wi h a Qual
VAR, i is possible o c ea e dynamic o ecas s o he quali a i e a iable using
s anda d VAR o ecas s. P e ious o ecas ing me hods o quali a i e a iables,
in con as , only p oduce s a ic o ecas s. Dueke applied he Qual VAR o o e-
cas ing he 2001 US business ecession. Ou o sample, he model p edic ed he
iming o he 2001 ecession qui e well ela i e o he ecession p obabili ies pu
o h a he ime by p o essional o ecas e s. Mos impo an ly, unlike adi ional
app oaches in ecession modelling, Dueke included a bina y indica o o each
ecession as a dynamic componen in he Qual VAR model. As an augmen ed
VAR, he Qual VAR, which includes in o ma ion abou he quali a i e a iable
in he o m o a unca ed no mal la en a iable, can also enhance he quali y o
densi y o ecas s o o he a iables in he sys em, such as ou pu g ow h, ela i e
o he VAR wi hou he quali a i e a iable.
Chen (2014) applied he Qual VAR me hod de eloped by Dueke (2005) o sea ch
o he mac oeconomic indica o s ha ully i he in-sample mo emen s o busi-
Jou nal o Cen al Banking Theo y and P ac ice
64
ness cycle luc ua ions and accu a ely p edic he ou -o -sample ecession p ob-
abili y in Canada. This s udy examined he pe o mance o se e al leading indi-
ca o s in p edic ing u u e Canadian ecessions using he sample om 1959 o
2012. Consis en wi h he indings om Es ella and Mishkin (1998), his pape
inds ha he slope o he yield cu e p o ides he mos eliable in-sample i ness
o economic u ning poin s in ecen Canadian his o y. Besides, he US-Canada
noon-spo ed exchange a e also p esen s some in-sample o ecas ing powe .
Howe e , none o he single a iables included in his s udy p o ided signi i-
can ou -o -sample o ecas ing powe . Combining he exchange a e and he e m
sp ead p o ided he mos accu a e sho - e m signal o upcoming ecessions in
Canada. The addi ion o he g ow h a e o eal chain-weigh ed GDP o he ex-
change a e and he e m sp ead p oduced he mos us able o ecas ing model
in he long un. Besides he ad an ages, one canno igno e he ac ha Qual VAR
model may s ill su e om he po en ial o e i ing p oblem, hus ca e ul choice
o he app op ia e o ecas ing indica o s is c ucial.
Moon and Lee (2012) e alua ed he o ecas ing pe o mance o he Ko ean ESI
wi h espec o GDP g ow h and cycle. They ound ou ha hecons uc ed ESI
(based on business su ey index and consume su ey index) had a good ack-
ing pe o mance as a leading indica o o GDP. Using he G ange causali y es s,
hey showed ha he ESI p ecedes GDP g ow h, implying he o me con ains
use ul in o ma ion in p edic ing GDP g ow h. Also, using a p obi model, he
au ho s con i med ha he ESI is help ul in moni o ing and p edic ing he u n-
ing poin s o GDP.
3. T acking he leading ea u es o ESI wi h espec o GDP cycle
This Chap e aims o assess he ex en o which he Macedonian cyclical de elop-
men is a ec ed by changes in consume and p oduce business cycle e alua ions,
as summa ized by he Economic sen imen indica o o he Eu opean Commis-
sion. Sen imen su ey da a a e usually assumed o be leading a iables ela i e
o business cycles. The span o lead ime, howe e , is less ce ain and subjec o
empi ical e i ica ion. The amoun o lead ime may change o e ime as well. In
his sec ion, pa e ns o bo h he Macedonian business cycle and he economic
sen imen cycle a e analysed.
We ini ia ed he p ocedu e o mapping he peaks and oughs in he Macedo-
nian economic down u ns by i s adop ing a mul i a ia e case o Chow and Lin
(1971) as a empo al disagg ega ion me hod o es ima e mon hly om qua e ly
igu es o he o icial GDP. Fo he economic cycle indica o , he indus ial p o-

Fo ecas ing Macedonian Business Cycle Tu ning Poin s Using Qual Va Model 65
duc ion and e ail ade we e embedded as high equency ex e nal in o ma ion
ha is belie ed o sa is ac o ily ep esen he dynamics o he a ge a iable2.
The GDP cycle was ex ac ed by applying a double Hod ick-P esco (HP) il e
o he p e iously ob ained mon hly igu es. The HP il e is un wice o achie e
a smoo hed de- ended cycle ( emo ing a long- e m end om he season-
ally adjus ed GDP and hen smoo hing his de- ended se ies). Namely, se ing
λ = 133,107.94 in he i s s ep and hen imposing λ = 13.93 in he second s ep o
he il e ing p ocedu e allows us o emo e he cyclical componen s ha ha e a
cycle leng h longe han 120 mon hs and hose ha ha e a cycle leng h sho e
han 12 mon hs.3
The ESI is composed o he indus ial, se ices, consume , cons uc ion and e-
ail ade con idence indica o s. The economic sen imen indica o is compiled as
an index wi h mean alue o 100 and s anda d de ia ion o en o e a ixed sam-
ple pe iod. Values o he economic sen imen indica o abo e (below) 100 indi-
ca e abo e-a e age (below-a e age) economic sen imen . Fo he pu poses o he
econome ic analysis we gene a ed a smoo hed-cu e ep esen a ion o ESI. The
adjus men o he sensi i i y o he end o sho - e m luc ua ions is achie ed by
se ing he alue o he mul iplie λ o he HP il e o 13.93.
Eu opean Commission publishes ESI o Macedonian economy (and se e al o h-
e candida e coun ies) on mon hly basis, seasonally adjus ed. The su eys used
o cons uc his indica o o Macedonia we e launched o he i s ime in May
20084. The da a se managed in his pape spans o e he pe iod om May 2008
o Decembe 2014, e lec ing his pa icula limi a ion.
Figu e 1 displays he ajec o y o bo h ESI cycle and GDP cycle, wi h mon hly
equency. ESI cycle se es as a p oxy o consume s’ and p oduce s’ se o opin-
ions abou he gene al s a e o he economy. On he o he hand, GDP cycle de-
2 We also conside ed mon hly da a o cons uc ion wo ks, bu due o high ola ili y hey we e
no included in he in e pola ion p ocedu e.
3 Going om equencies o λ pa ame e is achie ed by subs i u ing in o he o mula:
λ=[4(1=cos(ω0))2]-1 whe eas ω0 is he equency exp essed in adians, and τ deno es he
numbe o pe iods i akes o comple e a ull cycle. The wo pa ame e s a e ela ed h ough
ω0 = 2π/τ . So he λ alues abo e co espond o τ =120 mon hs and τ =12 mon hs (Sou ce: OECD,
h p://www.oecd.o g/s d/composi eleadingindica o scli equen lyaskedques ions aqs.h m#12).
4 Howe e , he da a on con idence indica o o consume s a e published since May 2012. Ac-
co ding o he Use guide by EC, (Ma ch 2014), he ESI summa izes he con idence indica o s
in i e a eas o he economy, acco ding o he ollowing weigh s: indus y (40%), se ices (30%),
consume s (20%), cons uc ion (5%) and e ail ade (5%).
Jou nal o Cen al Banking Theo y and P ac ice
66
sc ibes he economic condi ions om he pe spec i e o p oduc ion and supply,
as well om consump ion and demand s anding poin .
The leading ea u e o he cyclical mo emen o ESI wi h espec o ha o GDP,
obse ed in Figu e 1, is also ully-con i med by he c oss-co ela ion analysis
o he cycles. To his end,
Table 1 sugges s pa e ns
o small leads and lags
be ween hese a iables,
a ac uali y which will
be picked up la e by he
Qual VAR model, gi en
i s dynamic s uc u e.
The maximum c oss-co -
ela ion is 0.71 and 0.68,
when he cyclical com-
ponen o ESI is 0 and
1 mon h ahead o GDP,
espec i ely, as shown in
Table 1.
Table 1: C oss-co ela ion o he cycles o he ESI and GDP
Leading (-1) o Lagging (+1) mon hs
-6 -5 -4 -3 -2 -1 012345 6
0.06 0.22 0.38 0.51 0.61 0.68 0. 71 0.61 0.48 0.34 0.21 0.08 -0.02
The de ec ed ela ion be ween he c oss- abula ed a iables leads us o a s a ic
p obi model aiming a u he examining he leading p ope y o he cyclical
componen o ESI wi h espec o ha o GDP. To his end, ou app oach is ex-
ac ly analogous o ha o Moon and Lee (2012). Addi ionally, in con inua ion in
his Chap e we p o ide an e alua ion o he o ecas pe o mance o he ESI cy-
cle in iden i ying he business cycle u ning poin s in bo h in-sample and pseudo
ou -o -sample con ex .
Following Moon and Lee (2012), we de ine a bina y dependen a iable, Y which
akes on only alues o one and ze o as ollows:
1, i he economy is in decele a ion pe iod
Y =
0, o he wise
Figu e 1: Cyclical componen s o ESI and GDP
Fo ecas ing Macedonian Business Cycle Tu ning Poin s Using Qual Va Model 67
Then he es ima ed p obabili y o being in he decele a ion pe iod is o he o m
whe e x1 ... , xk a e k explana o y a iables, β1 ... , βk, a e he co esponding eg es-
sion coe icien s and F is he cumula i e dis ibu ion unc ion (cd ) o a s anda d
no mal dis ibu ion, i.e.,
He e he decele a ion pe iod is de ined based on he peak and ough poin s o
he GDP cycle. The con empo aneous and lagged alues o he cyclical compo-
nen o he ESI a e in oduced as explana o y a iables in he p obi model om
abo e. Mo eo e , Table 2 shows ha bo h o hem a e s a is ically signi ican .
No e ha he sign o es ima ed coe icien o ESI_CYC(-1) is posi i e, implying
ha ESI_CYC(-1) and he con empo aneous GDP cycle end o co-mo e.
We also ca ied ou he LM es o he e oscedas ici y using he a i icial eg es-
sion me hod desc ibed by Da idson and MacKinnon (1993, sec ion 15.4). We
es ed he null hypo hesis o homoscedas ici y agains he al e na i e o he e o-
scedas ici y. So o his end, he null was accep ed. We also pe o med he Hos-
me –Lemeshow goodness-o - i es . The es esul s con i med ha he model is
co ec ly speci ied.
Table 2: P obi model es ima ion
Va iable Coe icien S d. E o z-S a is ic P obabili y
C9.1340 3.0781 2.9674 0.0030
ESI_CYC -0.8864 0.1829 -4.8453 0.0000
ESI_CYC(-1) 0.7965 0.1650 4.8263 0.0000
McFaddenR-squa ed 0.3953
Hosme -Lemeshow chi2(8) = 3.5217
P ob > chi2 = 0.8975
He e oscedas ici y L-M es = 2.8737
P obabili y = 0.2377
F om he es ima ed p obi eg ession, he p obabili y o being in he decele a ion
pe iod can be compu ed o each da a poin , which is called in-sample o ecas .
The p obabili ies om he in-sample o ecas a e g aphed oge he wi h he GDP
cycle in Figu e 2.
Jou nal o Cen al Banking Theo y and P ac ice
68
The es ima ed p ob-
abili ies a e shown o be
high in he shaded a eas
which ep esen Macedo-
nian business cycle eces-
sions. In pa icula , hey
a e close o 1 du ing he
decele a ion phase span-
ning om mid-2008 o
mid-2009, e lec ing he
new global eali y i.e.
he global down u n and
mid-2011 o end-2012 e-
lec ing he second wa e
o he c isis (G eek deb
c isis).
In addi ion, ecu si e 1-s ep ahead ou -o -sample o ecas s we e un o e he pe-
iod om May 2011 o Decembe 2014. The p edic i e accu acy o hese o ecas s
is e alua ed by compa ing a pe cen age o co ec classi ica ion based on he p e-
speci ied cu o alue, which is p ocedu e analogous o ha desc ibed in Moon
and Lee (2012). So, he e a e wo ypes o co ec classi ica ions. One is ha he
p edic ed p obabili y is g ea e han he cu o and he obse ed Y =1, and an-
o he is ha he p edic ed p obabili y is less han o equal o he cu o and he
obse ed Y =0.5 The po ion o Y =1 obse a ions ha a e co ec ly p edic ed is
called sensi i i y, while he ac ion o Y =0 obse a ions ha a e co ec ly classi-
ied is called speci ici y. In his pa icula empi ical implemen a ion, he sensi i -
i y is calcula ed o he decele a ion phase and he speci ici y o he accele a ion
phase. Mo eo e , a pe cen age o co ec classi ica ion among o al obse a ions
is calcula ed.
5 Recessions / expansions a e de ined by he bina y code 1 / 0. Fo example, wi h cu o alue o
0.6, all esul s o he p obi model o ecession wi h p obabili y equal o highe han 0.6 will be
plausible.
Figu e 2: Es ima ed p obabili ies and he GDP cycle
No e: P-peak, T- ough.
Fo ecas ing Macedonian Business Cycle Tu ning Poin s Using Qual Va Model 75
in pu e eal ime bu om he la es a ailable da a se – a p ac ice pe cei ed as a
na u al amewo k o e alua e he alue added in o ecas ing.
The Figu e 3 plo s he
pseudo eal- ime p edic-
ion o he di ec ion o
he business cycle in 2013
om in o ma ion se end-
ing in Decembe 2012.
The ex pos knowledge
on he eal di ec ion o
he GDP cycle in he co -
esponding pe iod poin s
ou ha he accu acy o
he index is limi ed o
only nea - e m business
cycle de elopmen s ( he
i s ew mon hs).
In o de o achie e g ea e quali y assu ance, we pe o med an addi ional obus -
ness check by epea ing he abo e p ocedu e on a da a se ending in Decembe
2010. This ime, esul s comply wi h subsequen knowledge o he cyclical ac s
o he en i e 2011. Howe e , like in he p e ious case, he empi ical indings a e
s a is ically signi ican only o a e y sho ho izon.
5.2. Pu e ou -o -sample esul s
Figu e 4 displays he
model simula ed ajec-
o y o he business cycle
di ec ion in 2015 om an
in o ma ion se ending in
Decembe 2014.
The p edic ed aise in he
index indica es ha he
business cycle condi ions
a e expec ed o imp o e
in 2015, i.e. a ecession
is no o eseen ha a
Figu e 3: Pos e io mean o la en a iable and i s
12-mon hs-ahead o ecas (shaded a eas indica e
ecession da es)
Figu e 4: Pos e io mean o la en a iable and i s
12-mon hs-ahead o ecas (shaded a eas indica e
ecession da es)

Jou nal o Cen al Banking Theo y and P ac ice
76
ahead. Bu again, he s a is ically signi ican pe iod spans only o e he i s ew
mon hs o 2015.
All in all, he esul s sugges ha ou Qual VAR p edic s he business cycle de-
elopmen s easonably well on a nea - e m ho izon, so ha o ecas s o i a e
pe cei ed o be a use ul addi ion o NBRM’s exis ing amewo k aimed a GDP
nowcas ing.
6. Conclusion
The de i a ion o a mix o mac oeconomic indica o s ha could summa ize and
p edic business cycle pa e ns is usually a challenging ask, gi en he luc ua-
ions in mac oeconomic condi ions. A good unde s anding o business cycle ac s
is c ucial o mac oeconomic decision-making, especially in mone a y and iscal
policies. This pape desc ibes he p ocedu e o mapping he peaks and oughs
in he Macedonian economic cycle. A numbe o ecen s udies in his a ea com-
bine adi ional p obi models and ec o au o eg ession models o de elop mo e
comp ehensi e dynamic p obi VAR app oaches and ha is also done in his pa-
pe in he case o Macedonian economy.
Sen imen su ey da a a e commonly assumed o be leading a iables ela i e o
business cycles, he e o e, we use he Economic sen imen indica o (ESI) pub-
lished by he Eu opean Commission o he Macedonian economy. The de ec ed
ela ion be ween hese wo a iables poin s us o a s a ic p obi model aiming
a u he examining he leading p ope y o he ESI wi h espec o GDP. Ad-
di ionally, we p o ide an e alua ion o he o ecas pe o mance o he ESI cycle
in iden i ying he business cycle u ning poin s in bo h in-sample and pseudo
ou -o -sample con ex . The es ima ed p obabili ies wi hin in-sample o ecas a e
shown o be high du ing he decele a ion phase o he Macedonian business cycle
spanning om mid-2008 o mid-2009, e lec ing he global economic down u n
and om mid-2011 o end-2012 e lec ing he second wa e o he c isis (G eek
deb c isis). The p edic i e accu acy o ou -o -sample o ecas s is e alua ed by
compa ing a pe cen age o co ec classi ica ion based on he p e-speci ied cu o
alue, which is p ocedu e analogous o ha desc ibed in Moon and Lee (2012).
The es ima ed p obi model seems o iden i y he business cycle u ning poin s
sa is ac o ily well.
Acco ding o a la ge and g owing body o li e a u e, he inclusion o dynamic
elemen s in he p obi models can yield mo e accu a e o ecas s o ecessions
han s anda d p obi eg essions. The e o e, we adap he Qual VAR model om
Fo ecas ing Macedonian Business Cycle Tu ning Poin s Using Qual Va Model 77
Dueke (2005). Ou Qual VAR model pu oge he he ollowing indica o s: eal
GDP (in e pola ed GDP, wi h mon hly equency), ESI and he capaci y u iliza-
ion a e in manu ac u ing. Conside ing i s easonably good ack eco d in ap-
p oxima ing he business cycle ac s in pseudo ou -o -sample con ex , we ound
ha ou Qual VAR is sa is ac o ily success ul in he accu a e and imely assess-
men o nea - e m business cycle de elopmen s. To his end, he o ecas s o i
a e pe cei ed o be a use ul addi ion o he NBRM’s exis ing amewo k aimed a
GDP nowcas ing.
Jou nal o Cen al Banking Theo y and P ac ice
78
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