Francis Diebold, 22 January 2021

Measuring real economic activity in real time is crucial for the design and implementation of macroeconomic policies. This column documents the path of the Aruoba-Diebold-Scotti index, which provides a real-time assessment of US business conditions before official data like GDP are officially released, during the pandemic recession entry and relates it to the progress of COVID-19. The index proves a good indicator of the path of real time activity and a strong negative correlation to the rate of new COVID cases.

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