An Index of Leading Indicators on Inflationary Trends and the Business Cycle *

For central banks and other institutions or private professional forecasters it is important to have indicators which can reliably predict price and business cycle trends. For many purposes forecasting their level is probably less important than analysing the basic direction in terms of the trends of inflation and GDP growth and the turning points in their development. Ideally, a leading economic indicator should be able to identify and forecast lasting and substantial changes in the rate of inflation and GDP growth quickly and at an early stage.