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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.

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Aug 01 2012

Australian Policymakers’ Confidence May Be Misguided

ECRI has just updated its Australian Long Leading Index (AULLI). The value of this index lies in its ability to anticipate cyclical turns in the economy before conventional leading indexes.

Australia recently celebrated its 21st consecutive year of economic expansion, and the country’s low interest, inflation and unemployment rates have its policymakers content, with Treasurer Wayne Swan calling the country’s economic fundamentals “the envy of the developed world.” However, consumer and business confidence surveys show growing pessimism over concerns of falling home prices, a downturn in commodity prices, and a slowdown in China.

ECRI’s latest update to the AULLI provides insight into whether Australia’s outlook is as bright as the policymakers think, or if doubts are warranted.

Related Insights

The Yo-Yo Years

ECRI March 1, 2012

The convergence of two cyclical patterns virtually dictates an era of more frequent recessions in developed economies. As a result, and because of the Bullwhip Effect, growth in developing economies is going to be jerked around more than people think, making for a good deal of cyclical economic contagion. In other words, we are now in the yo-yo years.

 

Related News & Events

Recession Here

Bloomberg July 10, 2012

It takes time to realize that a recession has already begun. More