Composite Leading Indicators of Economic Cycles of V4 Countries and their Comparison to the CLI of the Eurostat and the OECD

This article´s objective is to suggest and create the composite leading indicators and their importance for monitoring in a short term prediction of economic cycles in the V4. We describe in detail the methodologies of OECD and Eurostat, which deal with the prediction of the economic cycles in the V4 countries through CLI. The relation of 475 selected economic indicators and reference series, which represent the economic cycle of the V4 countries, is analyzed in the empirical part of this article. Based on the performed analysis, we define groups of leading, parallel and lagged indicators. We choose those leading indicators that are the most appropriate for the creation of CLI. Then the created CLIs and their prediction abilities are studied through the values of crosscorrelations. Besides the creation of our own CLIs, we also compare them with CLIs of Eurostat and OECD and create the conclusions on suitability resp. unacceptability of the individual CLIs for a given V4 country.