A World Trade Leading Index (WTLI)

15 Pages Posted: 23 Feb 2015

See all articles by Karim Barhoumi

Karim Barhoumi

International Monetary Fund (IMF)

Laurent Ferrara

SKEMA Business School; Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA); Université Paris Ouest - Nanterre, La Défense - EconomiX

Date Written: January 2015

Abstract

This paper develops a new monthly World Trade Leading Indicator (WTLI) that relies on nonparametric and parametric approaches. 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. We also show that this cyclical indicator is able to track the annual growth rate in global trade, suggesting that the recent slowdown is due in part to certain cyclical factors. This new tool can provide policy makers with valuable foresight into the future direction of economic activity by tracking world trade more efficiently.

Keywords: International trade, Cyclical indicators, Indicators of economic activity, Data analysis, World trade, leading indicators, factor models., growth rate, variables, trough, business climate, price, gdp, commodities, volatility, future, value, benchmark, exchange, economic statistics, data availability, protectionism, commodity, exchange rate, macroeconomic forecasting, static analysis, goods, expectations, theory, macroeconomics, diffusion indexes, measurement, output, prices

JEL Classification: F17, F47, E37

Suggested Citation

Barhoumi, Karim and Ferrara, Laurent, A World Trade Leading Index (WTLI) (January 2015). IMF Working Paper No. 15/20, Available at SSRN: https://ssrn.com/abstract=2568595

Karim Barhoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Laurent Ferrara

SKEMA Business School ( email )

Paris la Défense, 92916
France

Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA) ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

Université Paris Ouest - Nanterre, La Défense - EconomiX ( email )

200 Avenue de la République
92000

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