Ifo Survey Data in Business Cycle and Monetary Policy Analysis

A pilot ?ying to a distant city needs to check his position, ?ight path and weather conditions, and must constantly keep his plane under control to land safely.TheIfosurveydataprovideadvanceinformationonchangingeconomic weather conditions and help keep the economy under control. To be sure, by their very nature they only provide short-term information. But like a plane, the economy will not be able to reach its long-term goals if it strays o? course in the short term. The Ifo survey data provide the most comprehensive and accurate, - to-date database in Europe on the state of the business cycle, and the Ifo climate indicator, sometimes simply called “The Ifo”, is the most frequently cited indicator of its kind in Europe. Both the European stock market and theeuroreacttoourindicator.Ifo’smethodologyfordeterminingthebusiness climateindicatorhasbeenexportedtomorethan?ftycountries,mostrecently toTurkeyandChina.TheIfopeoplewereproudtohavebeenaskedtohelpset up polling systems in these countries. It is said that the Chinese government relies more on their “Ifo indicator” than on their o?cial accounting statistics.

The business surveys of the Ifo Institute (short for Information and Forschung) are internationally renowned. Every month close to 7,000 enterprises are questioned on their short-term planning and their appraisals of the actual and future business situation. The confidence indicator frequently referred to as the Ifo Business Climate Index is derived from the responses to this Ifo Business Survey. While the Index attracts a lot of attention by practitioners (especially financial market analysts), the use and empirical exploitation of this and other components of Ifo business surveys is – amongst academics – still relatively scarce. The present volume, based on a conference entitled "The Academic Use of Ifo Survey Data", gives examples of timely research questions which can be addressed by qualitative survey data like the monthly Ifo Business Survey. It shows that this type of real-time data can be very informative when it comes to forecasting real economic activity or exploring monetary policy transmission.