What is the main distinction of the CMI model from other ones?
The main distinction of the CMI model
-The CMI model differs from other models as it has “a lead time period” that allows the use of information about the past for future predictions.
The lead time period in the US business cycle refers to the amount of time between the peak of economic expansion and the onset of a recession. This period is also known as the “warning period” or “lead indicator period.”
Read more about the lead time period in the meaning of CMI model econometrics here.
How does the CMI model lead time signals allow using the information of the past for future forecasting?
Official statistics information is typically delayed by three months. However, the CMI model’s lead time signals allow us to identify potential recession incentives six to nine months ahead of official statistics. This means that we can provide our subscribers with a valuable head start in making informed investment decisions and potentially avoiding losses associated with economic downturns.