A Financial Conditions Index for Poland
Electronic Access:
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Summary:
This paper constructs a financial conditions index for Poland to explore the link between financial conditions and real economic activity. The index in constructed by applying two complementary approaches—factor analysis and vector auto-regression approach. We evaluate the index’s forecasting performance against a composite leading indicator developed by the OECD. We found that the FCI is highly correlated with GDP growth, attesting to the importance of financial sector in Poland’s economy. In-sample and out-of-sample forecasting exercises indicate that the FCI can outperform the CLI in predicting near-term GDP growth.
Series:
Working Paper No. 13/252
Subject:
English
Publication Date:
December 19, 2013
ISBN/ISSN:
9781475540642/1018-5941
Stock No:
WPIEA2013252
Format:
Paper
Pages:
16
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