Analysis of Indonesia Business Cycle through Composite Leading Indicator Data Processing for Banking Industry

Riwi Sumantyo, Annisa Wahyuningsih


This study aimed to analyze business cycle of Indonesia through data processing CLI (Composite Leading Indicator) and to obtain an investment leading indicator which a composite of several indicators. This study used OECD method and used time series data, i.e. quarterly data from 2001-2013. The result of the analysis of this study was the formed CLI was well functioned (significant), although the correlation coefficient both not overlapped (low). Because IDX Composite movement was more volatile than GDP movement. However, the formed CLI was capable in following the cyclical movement of the reference series (significant). The result of hypotheses in this study was assumed that there were some variables that met the category as leading indicator in GDP reference series that were: CPI, exchange rate, property credit and housing loan. While the variables in the reference series IDX composite namely: import capital, Pi_paper, export manufacture, export agriculture, housing loan and property credit. In this study, especially for the government and central bank (Bank of Indonesia), they should be able to work together in making policies that pay attention to the economic variables classified in leading indicators.



Composite Leading Indicator; Gross Domestic Product; Leading Indicator; Stock Price Index


Babecký, J., Havránek, T., Matějů, J., Rusnák, M., Šmídková, K., & Vašíček, B. (2012). Banking, debt, and currency crises: Early warning indicators for developed countries. Working Paper Series, 1485, 1-45.

Barrell, R., Davis, E. P., Karim, D., & Liadze, I. (2010). Bank regulation, property prices, and early warning systems for banking crises in OECD countries. Journal of Banking & Finance, 34(9), 2255–2264.

Borio, C., & Lowe, P. (2002). Assessing the risk of banking crisis. BIS Quarterly Review, 43–54.

Bussiere, M., & Fratzscher, M. (2006). Towards a new early warning system of financial crises. Journal of International Money and Finance, 25(6), 953–973.

Cecchetti, S. G., Alfonso, F., & Krause, S. (2006). Has monetary policy become more efficient? A cross country analysis. Economic Journal, 116(511), 408-433.

Ciccarelli, M., Maddaloni, A., & Peydro, J. -L. (2010). Trusting the bankers: A new look at the credit channel of monetary policy. ECB Working Paper, 1228.

Crespo-Cuaresma, J., & Slacik, T. (2009). On the determinants of currency crisis: The role of model uncertainty. Journal of Macroeconomics, 31, 621–632.

Dell’Ariccia, G., Detragiache, E., & Rajan, R. (2008). The real effect of banking crises. CEPR Discussion Paper, 5088, 89–138.

Demirgüç-Kunt, A., & Detragiache, E. (1998). The determinants of banking crises in developing and developed countries. IMF Staff Papers, 45(1), 81–109.

Demirgüç-Kunt, A., & Detragiache, E. (2005). Cross-country empirical studies of systemic bank distress: A survey. IMF Working Paper, 5(96).

Frankel, J. A., & Rose, A. K. (1996). Currency crashes in emerging markets: An empirical treatment. Journal of International Economics, 41(3–4), 351–366.

Frankel, J. A., & Saravelos, G. (2012). Can leading indicators assess country vulnerability? Evidence from the 2008–2009 global financial crisis. Journal of International Economics, 87(2), 216–231.

Kaminsky, G. L., & Reinhart, C. M. (1999). The twin crises: The causes of banking and balance-of-payments problems. The American Economic Review, 89(3), 473–500.

Kibritcioglu, B., Kose, B., & Ugur, G. (1999). A leading indicators approach to the predictability of currency crises: The cases of Turkey. Hazine Dergisi, Sayi Working Paper, 1998(12), 1-31.

Kusuma, I. G. P. W., Surjaningsih, N., & Siswanto, B. (2004). Leading indikator investasi Indonesia dengan metode OECD. Bulletin of Monetary Economics and Banking Journal, 6(4), 13-41.

Levy-Yeyati, E. L., & Panizza, U. (2011). The elusive costs of sovereign defaults. Journal of Development Economics, 94(1), 1–150.

Mankiw, G. N. (2000). Teori makroekonomi. Edisi Keempat. Jakarta: Erlangga.

Mody, A., & Sandri, D. (2012). The eurozone crisis: How sovereigns came to be joined at the hip. Economic Policy, 27(70), 199–230.

Nilsson, R., & Brunet, O. (2005). Composite leading indicators for major OECD non-economies countries: Brazil, China, India, Indonesia, Russian Federation, South Africa. Journal of Banking & Finance, 34(9), 2255–2264.

Reinhart, C. M., & Rogoff, K. S. (2011). From financial crash to debt crisis. American Economic Review, American Economic Association, 101(5), 1676–1706.

Setiana, M. (2006). Analisis leading indicator untuk business cycle Indonesia. Tesis. Fakultas Ekonomi dan Manajemen Institut Pertanian Bogor.

Zhang, W., & Zhuang, J. (2002). Leading indicators of business cycles in Malaysia and the Philippines. ERD Working Paper, 32.

Full Text: PDF


  • There are currently no refbacks.

For further information and submission, please visit the conference website:


Mailing Address:

Jurnal Keuangan dan Perbankan [Journal of Finance and Banking]
Department of Banking and Finance
Faculty of Economics and Business University of Merdeka Malang
2nd-floor Banking and  Finance Building, Jl.Terusan Raya Dieng No.57 Malang, 65146, Indonesia
Phone/WhatsApp: +628123321664; Fax. +62 341 580511

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.