Abstract
In this article a leading indicator of the South African business cycle is proposed which combines the traditional quantitative data inputs with qualitative data. The integration is achieved via the Kalman filter technique. It is shown that this model surpasses the traditional approaches in accuracy.
Highlights
It may be too much of a generalization to state that a schism exists between the protagonists and users ofquantitative and qualitative data respectively
The main thrust of business cycle research in the United States has been directed towards the construction of quantitative indicators, whereas the accent in Europe has been on the analysis of qualitative survey data
Efforts directed towards a synthesis were mainly due to econometricians trying to improve the forecasting accuracy of models based on quantitative data by introducing qualitative variables into their equations
Summary
In this article a leading indicator of the South African business cycle is proposed which combines the traditional quantitative data inputs with qualitative data. The integration is achieved via the Kalman filter technique. It is shown that this model surpasses the traditional approaches in accuracy. 1986, 17: 143-148 In hierdie artikel word 'n leidende indikator van die SuidAfrikaanse konjunktuur voorgestel wat op sowel die tradisionele kwantitatiewe data-insette as op kwalitatiewe data-insette steun. Daar word aangetoon dat hierdie model die tradisionele benaderings in akkuraatheid oortref. Paper presented at the 1985 Conference in Management and Economic Sciences, Cape Town, 29-31 October 1985. E.Smit Graduate School of Business, University of Stellenbosch, P.O. Box 610, Bellville, 7530 Republic of South Africa Accepted April 1986
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