A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.



A New Eurozone FIG

Because cycles in inflation are loosely related to, but distinct from, cycles in growth, it is better to use leading indicators of inflation to predict the timing of cyclical peaks and troughs in inflation.

A Future Inflation Gauge (FIG), that summarizes the movements of several key leading indicators of inflation, does this by measuring not actual inflation, but underlying inflationary pressures, which ultimately filter through into actual inflation. As a result, cyclical peaks and troughs in the FIG regularly anticipate peaks and troughs in the inflation cycle.

ECRI has developed a new Eurozone Future Inflation Gauge (EZFIG) which will be released on the first Friday of each month.