Abstract
In this paper, we construct Taiwan's coincident economic indicatorthrough the estimation of a one-factor dynamic model. We find some discrepancies between our coincident indicator and the one constructed by theCouncil of Economic Planning and Development (CEPD). In particular, ourindicator reaches earlier the peaks of some cycles than those of the CEPD's. We also find that these discrepancies are largely due to the fact that theCEPD adopts some nominal variables (e. g., nominal sales of manufacturesand nominal wage rate) when constructing the indicator while we employonly real variables.