1. Forecasting: Leading, Lagging and Coinciding Indicators

2. We want to Predict … Can we predict Business Cycles? No, not perfectly, but we can use various indicators to try and predict what might happen … To do this, we may use indicators.

3. Leading Indicators Change before the economy changes. Examples: (know all on page 7 of Business Cycle handout) 1.New Companies Registered. 2.Number of New Vehicles sold. 3.Job advertisements. Discussion: Why the above? (5-7 minutes).

4. Coincidental Indicators Occur at the same time as the performance of the economy. Examples: (know all on page 7 of Business Cycle handout) 1.Registered Unemployed. 2.Retail Sales. 3.Total non-agricultural employment. Discussion: Why the above? (5-7 minutes).

5. Lagging Indicators Only change after the Business Cyle. Examples: (know all on page 7 of Business Cycle handout) 1.Hours worked in construction. 2.Prime overdraft rate of banks. 3.Commercial vehicles sold. Discussion: Why the above? (5-7 minutes).