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1301. Composite Indexes of Leading, Coincident, and Lagging Indicators: June 2002

Publication Date:
06-2002
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The Conference Board announced today that the U.S. leading index held steady, the coincident index increased 0.3 percent, and the lagging index decreased 0.1 percent in June.Industrial production had its biggest gain this month since October 1998. This is the most significant factor that helped push the coincident index up in June. The index posted its largest increase in a six-month span since October 2000.The coincident index appears to be gaining momentum. While the index has not surpassed the previous peak in December 2000, it has been increasing or flat since the beginning of the year. To date, the index is less than 0.3 percent away from overtaking the December 2000 peak. Moreover, the gains in the index are well diffused. The one- and six-month diffusion for the coincident index have been above 50 percent for the past four months.Stock prices and consumer expectations are the primary components that are preventing the leading index from continuing its positive trend in June. The recent wave of questionable corporate practices and the lack of measures aimed at addressing them have largely contributed to the weakness in these two components.
Topic:
Economics and Political Economy
Political Geography:
United States

1302. Composite Indexes of Leading, Coincident, and Lagging Indicators: May 2002

Publication Date:
05-2002
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The Conference Board announced today that the U.S. leading index increased by 0.4 percent, the coincident index increased by 0.1 percent, and the lagging index decreased by 0.2 percent in May.The big jump in real money supply and initial claims for unemployment insurance were largely responsible for the leading index picking up in May. This marks the seventh increase in the leading index in the past eight months.The decline in the coincident index in the most recent recession was relatively modest. To date, the coincident index has only increased 0.4 percent from its lowest point in November 2001 compared to an average increase of 2.4 percent in the first six months of the past six recoveries.While the coincident index has been moderately improving, the lagging index has been steeply declining. This led to the seventh increase in the last eight months in the ratio of coincident to lagging index, a series that has historically led business cycles. This reinforces the continuation of the recovery.
Topic:
Economics and Political Economy
Political Geography:
United States

1303. Composite Indexes of Leading, Coincident, and Lagging Indicators: April 2002

Publication Date:
04-2002
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The Conference Board announced today that the U.S. leading index decreased by 0.4 percent, the coincident index increased by 0.2 percent, and the lagging index decreased by 0.4 percent in April.Real money supply, which shrank for the second consecutive month, and falling stock prices are the primary components that caused the leading index to drop for the first time since September 2001. The overall signal from the leading index, however, remains one of moderate economic growth.Modest gains in the coincident index in the past five months indicate a slowly recuperating economy. The six-month growth rate of the coincident index underscores this economic recovery posting its biggest gain in 15 months.While improvements in current economic activity have been moderate, the cost of doing business, as represented by the lagging index, has been steeply declining. This points to continued improvement in economic conditions in the near term.
Topic:
Economics and Political Economy
Political Geography:
United States

1304. Composite Indexes of Leading, Coincident, and Lagging Indicators: March 2002

Publication Date:
03-2002
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The Conference Board announced today that the U.S. leading index increased by 0.1 percent, the coincident index increased by 0.2 percent, and the lagging index decreased by 0.4 percent in March The leading index has been posting strong gains, growing by 2.9 percent from September 2001 to March 2002, and by 2.2 percent for each of the six-month periods ending January and February 2002. The gains would have been more robust had it not been for the weakness in building permits and claims for unemployment insurance Gains in industrial production in the last three months, coupled with a recovery in employment, have helped push the coincident index up. Negative trends in these indicators were largely responsible for the decline in the coincident index last year. US economic recovery appears to be underway. The combination of rising energy prices, the current global instability, and the more cautious consumer and business sectors, however, might slow the pace of economic growth in the near term.
Topic:
Economics and Political Economy
Political Geography:
United States

1305. Composite Indexes of Leading, Coincident, and Lagging Indicators: February 2002

Publication Date:
02-2002
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The Conference Board announced today that the U.S. leading index held steady, the coincident index increased by 0.2 percent, and the lagging index decreased by 0.3 percent in February. Even with a flat month-to-month growth in February, the leading index is still up 2.4 percent from its value six months ago in August 2001 and up 3.1 percent from its value a year ago. The modest gains in the coincident index appear to be gaining momentum. Should this trend continue, the trough of the recession would most likely be November 2001, making the most recent economic contraction very short and certainly the mildest in U.S. history. The coincident-to-lagging ratio, which has historically led business cycles, is up for the fifth consecutive month in February. This is another signal that an economic recovery is underway.
Topic:
Economics and Political Economy
Political Geography:
United States

1306. Composite Indexes of Leading, Coincident, and Lagging Indicators: January 2002

Publication Date:
01-2002
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The Conference Board announced today that the U.S. leading index increased by 0.6 percent, the coincident index held steady, and the lagging index decreased by 0.2 percent in January. The leading index posted a robust 2.2 percent increase from July 2001 to January 2002. This is the fourth consecutive month that the six-month growth rate of the leading index has improved. Meanwhile, the six-month diffusion index, which measures the number of components that are rising, has increased above 50 percent for the first time in 21 months. With a robust leading index, the coincident index appears to be bottoming out in the past two months. The rate of decline of nonagricultural payrolls and industrial production has slowed in the last three and four months respectively while personal income and manufacturing sales have essentially held their ground throughout the recession. The coincident-to-lagging ratio, which has historically led business cycles, is up for the fourth consecutive month in January. This underscores the strength of the leading index and indicates a likely economic recovery, barring any unexpected negative events.
Topic:
Economics and Political Economy
Political Geography:
United States

1307. Global Economic Prospects

Author:
Michael Mussa
Publication Date:
09-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The global economic recovery is continuing but at a somewhat slower pace than was anticipated six months ago. Specifically, using the country weights from the IMF's World Economic Outlook, the forecast for real GDP growth in the world economy during 2002 (i.e., on a fourth-quarter-to-fourth-quarter basis) is cut by about half a percentage point to 3 percent—a pace that is slightly below my estimate of the potential growth rate for world GDP. This downward revision reflects primarily slower growth than earlier expected during the first half of 2002 in most industrial countries and the expectation that growth will remain somewhat more sluggish than earlier expected at least through year-end. For 2003, the forecast for global economic growth is also cut by about half a percentage point—to 4 percent—reflecting both general factors suggesting slightly weaker performance in many industrial and developing countries and the particular economic risks arising from possible military action against Iraq and from potential credit events affecting key developing countries. Despite these downward revisions, however, there is little doubt that the world economy will see significant improvement this year from the 1 percent growth recorded in 2001, and it is still reasonable to expect further improvement to a growth rate modestly above global potential during 2003.
Topic:
Economics
Political Geography:
United States, Iraq, Europe, Israel, Asia, South America, Latin America, and North America

1308. The Foreign Sales Corporation: Reaching the Last Act?

Author:
Gary Hufbauer
Publication Date:
11-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Some trade disputes—like long Russian novels—never seem to end. The United States, Europe, and other trading nations have disputed the taxation of export earnings since the 1970s. To understand why the Foreign Sales Corporation (FSC) dispute is so hard to resolve, we must start with a historical tour.
Topic:
Economics and Political Economy
Political Geography:
Russia, United States, and Europe

1309. Support the Ex-Im Bank: It Has Work to Do!

Author:
Gary Clyde Hufbauer and Ben Goodrich
Publication Date:
05-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The US Export-Import (Ex-Im) Bank is again at the center of controversy, as Congress debates the terms for its charter renewal. This policy brief critiques provisions of the House and Senate versions of the reauthorization bill and summarizes three justifications for Congress giving adequate support to the Ex-Im Bank. Box 1 provides a capsule description of the Ex-Im Bank's operations.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

1310. Economic Issues Raised by Treatment of Takings Under NAFTA Chapter 11

Author:
Edward M. Graham
Publication Date:
11-2002
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This working paper examines, from an economic perspective, the treatment of takings (property rights) under NAFTA Chapter 11. To be more precise, the paper examines the treatment of takings as environmental groups fear might be established as the result of investor dispute settlement under this chapter; as of the date of this writing, most of the cases that have the potential to be precedent-setting have not been finally decided, albeit one—the Metalclad case—has been decided in a way that is unsettling to environmentalists. The author attempts to determine whether requiring public compensation of private investors for diminishment of value resulting from government regulatory action has the potential of achieving anything close to an “optimal” outcome from a societal cost-benefit point of view (defined below). This determination makes use of tools of economic analysis and, in particular, Coase's theorem regarding achieving optimal outcomes where negative externalities are present. The overall conclusion is that, although Coase's theorem can be invoked to argue that such an outcome can be achieved either via a “polluter pays” approach or a “public pays” (or “public must compensate”) approach, as a matter of practical application, the first approach is preferable to the second for a number of reasons, including government “fiscal illusion” and “moral hazard.”
Topic:
Economics and International Organization
Political Geography:
United States, Latin America, and North America