A World Trade Leading Index (WTLI)
Karim Barhoumi
, Olivier Darné
,
2016, Economics Letters, 146, pp.111-115
Abstract
This paper develops a new monthly World Trade Leading Indicator (WTLI) that relies on a dynamic factor model estimated on set of leading indicators of world trade activity. Compared to the CPB World Trade Monitor's benchmark indicator for global trade the WTLI captures turning points in global trade with an average lead between 2 and 3 months. This new tool can provide policy makers with valuable foresight into the future direction of economic activity by tracking world trade more efficiently.