Page - 71 - in The Austrian Business Cycle in the European Context

71 7. Analysis of turning points Following the dating process, an analysis of the turning points gives further insight into the comovement of cycles. This can be done on the basis of the turning points themselves, by comparing their dis- tance from one another or to the ones found in other time series96• Furthermore, it is of interest to look at the time series properties at these points in time, in order to get some insight into the strength of the cyclical variation. The following statistics should give greater insight into the duration of cycles and phases, their amplitudes, and whether they behave asymmetrically or co-move with other series. Eventually this can lead to a new dating of the whole busi- ness cycle. 7.1 Mean and average leads and lags When observing the dates of turning points of two different time series (one being regarded as the reference cycle), it is possible to calculate the distance between these turning points. As this dis- tance can vary from cycle to cycle, some summary method is necessary to get an overview of their behaviour over the whole time span. For that purpose, the median conveys a more robust picture of such properties, as some exceptional data points can have a large influence on the mean97• Additionally, some thresh- olds for minimum distances are necessary for the classification of coincident, leading and lagging properties, taking also account of counter-cyclical and unclassifiable relations. 96 A practical application of this method is the construction of the OECD leading indicator. It should give an early signal of business cycle turning points by making use of leading turning points of other economic time series. 97 It is recommended to use both moments together, as they can deliver important information about the distribution of the lead and lag structures.