Project Description

Business cycle studies play an important role in the decision making process of government and private sectors. Leading or coincident indicators are often used in the forecast of the forthcoming change in the business cycle. While a well performed leading indicator could be valuable for the decision makers in terms of the direction, timing and magnitude of the future phase change, a poorly performed indicator could be misleading for its end users. In the current NBER indicator system, the service sector is unfortunately underrepresented, given the primary focus on the manufacturing sectors. But fortunately, the Transportation Index developed by Lahiri et al fill a gap in the literature and practice as well.

The New York Metro Region is one of the most important metropolitan areas in the country, with over 21 million in population, and represents 974 Billion dollars per year or about 9% of the United States GDP. Transportation is a very critical component of the region’s economy. It is necessary to explore the relationship between the transportation sector and the general economy in this region, and develop a regional transportation index and use it as a predictor of the business cycle movement in this area. In this regard, the Transportation Index developed by Lahiri et al can be used as a basis to develop a New York Metro Regional Index.

For doing so, we need to assess the applicability of the Lahiri Index to the New York metro area, and identify the metrics, data, and methodologies needed for developing New York Metro Index. The application for this grant is to support the investigators to conduct such an assessment with needed time, data and other resources.