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Stefan Trueck

Stefan Trueck

A2B Symposium - Academic 2 Business - Research informing Business

19th November 2014, InterContinental Sydney, 117 Macquarie St, Sydney NSW, Australia

Professor Stefan Trueck

Topic: Real-Time Business and Financial Conditions Indicators

(Joint work with Prof Jeffrey Sheen, Dr. Chi Truong and Dr. Ben Wang,
Faculty of Business and Economics, Macquarie University)

Abstract:

We develop unobservable business and financial conditions indicators for Australia and different regions in the world. The proposed framework can accommodate a combination of macroeconomic and financial factors arriving at mixed frequencies. For Australia, we find important links between the derived domestic and external indices, consistent with the small open economy assumption. A business confidence measure and the terms of trade play significant roles for the indices, making them leading indicators. We also develop an early-warning indicator for systemic risk and illustrate its usefulness for deriving probabilities for systemically relevant defaults in the financial industry.

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