Economics and management of national economy

An early warning indicator of economic vulnerability constructing for Malaysian economy

Economic Annals-XXI

Economic Annals-ХХI: Volume 149, Issue 3-4(1), Pages: 37-41

Citation information:
Shazali Abu Mansor, Chin-Hong Puah, Venus Khim-Sen Liew, & Shirly Siew-Ling Wong (2015). An early warning indicator of economic vulnerability constructing for Malaysian economy. Economic Annals-XXI, 3-4(1), 37-41. https://ea21journal.world/index.php/ea-v149-09/

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Shazali Abu Mansor
PhD (Economics),
Professor,
University of Malaysia Sarawak
94300 Kota Samarahan, Sarawak, Malaysia
mshazali@feb.unimas.my

Venus Khim-Sen Liew
PhD (Economics),
Associate Professor,
University of Malaysia Sarawak
94300 Kota Samarahan, Sarawak, Malaysia
ksliew@feb.unimas.my

Chin-Hong Puah
PhD (Economics),
Associate Professor,
University of Malaysia Sarawak
94300 Kota Samarahan, Sarawak, Malaysia
chpuah@feb.unimas.my

Shirly Siew-Ling Wong
PhD Candidate (Economics),
University of Malaysia Sarawak
94300 Kota Samarahan, Sarawak, Malaysia
shirlywong87@hotmail.com

An early warning indicator of economic vulnerability constructing for Malaysian economy

Abstract. The initiative to capture the information content behind the rise and fall of the business cycle has popularized the study about leading indicators. Many of the foreign experiences shared by economically advanced countries evidently show that the leading indicators approach work well as a short-term forecasting tool. Thus, exploring into an indicator-based forecasting tool for business cycle analysis and economic risk monitoring, it would be an insightful move to the Malaysian economy as well as others emerging countries. By extending the ideology of indicator construction from the US NBER, the present study demonstrates a strong potential of the leading indicator approach to be a good gauge of the business cycle movement besides being a practically functional early warning indicator for economic vulnerability prediction.

Keywords: Business Cycle; Composite Leading Indicator; Early Warning Indicator; Turning Points

JEL Classіfіcatіon: E32; E37; C32; C43

Acknowledgement. The authors acknowledge the financial support of the University of Malaysia Sarawak and Exploratory Research Grant No ERGS/01(01)854/2012(06).

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Received 2.03.2015

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