Coincident and Leading Indicators for Brazilian Cycles

In this chapter, we develop coincident and leading indexes of economic activity for Brazil following the approach used by The Conference Board (TCB). We show that our selection of coincident indicators and the composite index created from them closely follow the Brazilian Business Cycle Dating Committee (CODACE) chronology. Using the coincident index as the target variable, we select a small set of leading indicators and show that the composite index of these indicators help predict turning points in the business cycle better than its individual components.