Nama : FERRY INDAH LESTARI

NIM : 044207193

Mata Kuliah : Bahasa Inggris Niaga 137

Tugas :1

Essay :

A. Business cycle is the most powerful tool to measure economic performance

Do you agree or disagree with the statement?

Jawaban :

Yes I agree, The economic growth of a country can fluctuate in the form of a business cycle
caused by factors both domestically and abroad. For this reason, knowledge about the position of
the Indonesian economy needs to be known, especially for the government, monetary authorities,
and other economic actors, including businessmen. By knowing the position and direction of the
economy, the risks caused by uncertainty can be minimized. This study will create a leading
economic indicator which is a composite of macroeconomic indicators ranging from the
financial, industry, and foreign trade sectors that can predict Indonesia's macroeconomic
conditions which are approached by data on Gross Domestic Product (GDP) growth using
growth cycle approach developed by the Organization for Economic Cooperation and
Development (OECD). The type of data to be used is secondary data. GDP data as a reference
series is obtained from the Central Statistics Agency (BPS). The data for the predecessor
indicator series were obtained from various sources such as BPS, Bank Indonesia, the Indonesia
Stock Exchange, and the CEIC database. The frequency of data used is quarterly data. The
observation period is from the second quarter of 2000 to the third quarter of 2012. The variables
are the Composite Stock Price Index, Car Sales, Number of Airplane Passengers, Total Money
Supply (M1), Cement Consumption, Exports of Electrical Component Products, and Exports of
Palm Oil. The method used in this research is the seasonally adjusted times series in the Census
X12-ARIMA program and the Christiano-Fitzgerald band-pass filter to obtain the business cycle
of GDP and the predecessor indicator series. The results of this study have succeeded in
establishing a reliable leading economic indicator with a high cross-correlation coefficient of
0.87.