Definition of the Lead time period in the meaning of CMI model econometrics.
The CMI model’s lead time is a period of time which starts to notify by signals of potential economic shocks. It precious indicator, which allows making decisions earlier than others. See it in Fig 1. graph Empirical verification of the CMI model.
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.”
The length of the lead time period can vary depending on a range of factors, including the severity of the impending recession, the effectiveness of government policies in addressing economic challenges, and global economic conditions. In general, the lead time period is often several months to a year before the start of a recession, but it can be longer or shorter depending on the specific circumstances. The CMI models lead time signals to allow us to identify potential recession incentives three to nine months ahead of the actual economic shock that may cause a recession. This is because the model forecasts the result of economic activity and the incentives driving it. By identifying changes in thousands of parameters over time, the model can detect patterns that may signal a future economic downturn, providing subscribers with an early warning that can help them make more informed investment decisions.