Assessment of the
Leading Indicator Properties
of Economic Variables for
France, Germany, and Italy

This paper considers the leading indicator properties of quantitative and qualitative variables for France, Germany, and Italy. The analysis employs cross-correlograms to gain a basic understanding as to the lead-lag characteristics of indicator variables. Furthermore, the study qualifies the short-term and long-term linkages between possible indicator variables and the reference series of the business cycle by carrying out bivariate and multivariate Granger-causality tests and by estimating error correction models. The results suggest that the examined indicator variables generally establish a lead over the business cycle, albeit only at short horizons. Cross-country differences prevail as to the direction of the effect of a chosen variable on industrial production.