Brunhart, Andreas (2019): Der neue Konjunkturindex „KonSens“: Ein gleichlaufender, vierteljährlicher Sammelindikator für Liechtenstein. Bendern (Arbeitspapiere Liechtenstein-Institut, 62).

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Liechtenstein’s business cycle data base is scarce, the frequency mostly low and the publication lag sometimes large: The GDP is only available on annual basis and with a lag of 15 months. The composite (coincident) business cycle index presented in this paper, the “KonSens” (short for “Konjunktur-Sensor”, which is German for “business cycle sensor”), provides a quarterly common business cycle signal for Liechtenstein ("business cycle as a consensus") by applying a principal components aggregation of 16 individual business cycle indicators. This provides a valuable complement to the ordinary business cycle definition, which solely concentrates on the cyclical trend deviation of a single economic aggregate (typically GDP output gap). Additionally, the KonSens represents an aggregate economic business cycle signal with faster access, higher frequency, good reliability and easy interpretation. Besides extending Liechtenstein's business cycle analysis, it also improves the forecasting base – not only for Liechtenstein, but perhaps also for Switzerland (as Liechtenstein features a statistically significant business cycle lead to Switzerland). The KonSens could also serve as model for other (very) small countries that experience similar data restrictions or for autonomous territories, sub-national regions or even cities.

Keywords: Liechtenstein, Business Cycle Analysis, Business Cycle Index, Composite Indicator, Seasonal Adjustment, Principal Components Analysis
JEL classification: C01; C32; E32