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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Mar 16 2015

Prospects for German Business Expectations

The export-dependent German economy has been bolstered by the 25% plunge in the euro in less than a year. In addition, after 2014 GDP growth rose to 1.6%, well above the 2013 pace of just 0.2%, the European Commission upgraded its estimate for 2015 German GDP growth to 1.5% from 1.1%.  German growth forecasts were looking dim only a few months ago, but expectations for the increasingly competitive economy have become much brighter lately.

In this context we examine the relationship between the growth rate of ECRI’s German Long Leading Index (GELLI) and the Ifo Business Expectations Index. Because GELLI growth typically leads turning points in the Ifo Business Expectations Index, it offers a longer-term view, providing insight into whether or not the growing business optimism will persist.

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A Bit of a Surprise?

ECRI January 13, 2015

One of 2014's biggest surprises – falling oil prices – is completely consistent with our timely call on global growth. When made last July, that forecast was opposed to the consensus view. More