Two Probabilistic Cyclical Turning Point Indicators for the French Economy (Deux Indicateurs Probabilistes de Retournement Cyclique Pour L’Économie Française) (French)

Abstract

This paper proposes two new coincident probabilistic cyclical indicators developed by the Bank of France in order to follow, on a monthly basis, the French economic activity. The first one is an indicator which aims at detecting the turning points of the acceleration cycle while the second one is dedicated to the follow-up of recession phases in the industrial sector. Both indicators are based on the methodology of Markov-Switching models and use only for input the Bank of France monthly business survey. An historical validation since 1998 points out to the interest and the complementarity of both indicators for the short-term economic diagnosis. This kind of indicators provides with an original and additional conjonctural qualitative information by comparison with more classical quantitative tools aiming at estimating the GDP growth rate.