Construction of business confidence index based on a system of economic indicators

Abstract

One of the important indicators that characterize the economy of the country is the business confidence index. It is the basis for tracking the cycles of economic dynamics and analysis of the country's business climate. Evaluation of this indicator makes it possible to predict the crisis phenomena that are occurring in the economy, and to develop possible ways out of difficult situations. On the example of the five countries (Ukraine, Germany, Hungary, Slovenia, Poland) it was also analyzed the possibility of constructing the business confidence index based on economic indicators, which characterize current economic activity of the country. For analysis, the quarterly values of economic indicators over the last years were taken. The selected economic indicators based on cross-correlation analysis were ranked into three groups: coincident, lagging and leading indicators. Using coincident and leading economic indicators, the several regression models of the business confidence index were built. On the basis of the obtained regression models, the forecast of business confidence index value for the next period is evaluated and the trends of its development are established.

Brazilian farmer confidence in business performance

“…The Wilcoxon test (Mann-Whitney) is a non-parametric test that can be used to determine whether two independent samples were selected from populations that have the same distribution (Larson and Farber, 2010). The techniques of non-parametric statistics are adaptable to data from behavioral science (Siegel, 1956).…”

“…The basis for monitoring the cycles of economic dynamics and analyzing the business climate of a given sector are the entrepreneur's confidence indices (Los and Ocheretin, 2019). The evaluation of these indicators makes it possible to predict crisis or investment phenomena and develop possible solutions to difficult situations.…”

“…The behavior of consumers and other economic agents generates an important component in the analysis of macroeconomic dynamics (Ghosh, 2020;Ludvigson, 2004) and consequently allows for subsidizing public policies. Keynes (1936) already discussed and pondered the ways in which consumers' feelings and expectations can influence the real economy. The reverse is also true, institutions are influential in the rules of the game and players will make their decisions according to these rules (North, 1990).…”

Forecasting of the business confidence index of Ukraine on the basis of neural networks technologies

“…The National Bank of Ukraine has been conducting quarterly surveys regarding business confidence of enterprises since 2006 and calculates an aggregate index of survey resultsan index of business confidence, which is based on the expectations of enterprises regarding their development prospects in the next 12 months, in particular regarding the financial and economic situation, volume of sales, investment and employment. The business confidence index is calculated as the average value of response balances [7].…”

Neural network technology forecasting the country's business climate

“…Forecasting macroeconomic indicators happens with the help of the semantic path model. In the paper [4] a forecast of the business confidence index of Ukraine and four European countries (Germany, Hungary, Poland and Slovenia) is implemented, based on the regression models. The possibility of constructing the business confidence index based on economic indicators, which characterize current economic activity of the country.…”