ABSTRACT
This chapter discusses the large degree of uncertainty of business cycle analysis, not to mention the underlying decision processes of entrepreneurs and of politicians. Besides econometric forecasting models, leading indicators are still a mainstay of business cycle analysis. Statisticians and economists in the United States may be credited with being the first people to analyze economic time series thoroughly for their sensitivity to the business cycle. Work on business cycle surveys has been underway for more than thirty years. Before the actions of businesses and consumers are reflected in the data of the traditional economic statistics there is, as a rule, a phase during which the economic actors form judgments and anticipations. In addition, a large part of consumption as defined in the national accounts statistics is not very sensitive to the business cycle. This fact is reflected in the deviation from trend, which is greater on average for industrial production than for private consumption in all regions.
