Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/166062
Title: SINGAPORE : BUSINESS CYCLES, LEADING INDICATORS AND CAUSALITY
Authors: ONG CHIN HUAT
Issue Date: 1990
Citation: ONG CHIN HUAT (1990). SINGAPORE : BUSINESS CYCLES, LEADING INDICATORS AND CAUSALITY. ScholarBank@NUS Repository.
Abstract: SINGAPORE: BUSINESS CYCLES, LEADING INDICATORS AND CAUSALITY No one, whether he/she is an economist, a politician or a housewife, would like to experience a severe recession or inflation. The fight against unfavourable economic phenomena has led many academics to identify and develop early warning systems to predict economic upturns or downturns of business cycles. Such systems are called leading indicators. And whether such indicators do work is the main theme of this academic exercise. The analysis of this report employed eight leading indicators used by the Ministry of Trade and Industry, Singapore. With data on these variables and GDP, the Granger test of causality was utilized to test whether there was causal relationship between each leading indicator and GDP. This was done after adjusting for non-stationarity. The results of the Granger model were analysed for serial autocorrelation and error correlation. It was found that there was no serial autocorrelation for each model involving each of the eight leading indicators and GDP. But, error correlation was detected for three models. The presence of error autocorrelation inevitably cast some doubts on the validity of these three models. Finally, with both statistical analysis and economic rationale, only four of the eight leading indicators are found to lead the Singapore economy.
URI: https://scholarbank.nus.edu.sg/handle/10635/166062
Appears in Collections:Bachelor's Theses

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