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IU Northwest professors develop index to track region’s economy

Indices are capable of projecting local economic expansion or contraction six months in advance

Tuesday Sep 04, 2012

Twenty years have passed, and the Northwest Indiana economy is seeing about the same level of economic activity as it did in 1992. And, there are no indications of a rapid turnaround in the next few months.

That information comes courtesy of an index created by two Indiana University Northwest professors from the School of Business and Economics: Professor of Finance Bala Arshanapalli, Ph.D., and Professor Emeritus of Economics Don Coffin, Ph.D.

He and Coffin have spent the past year developing the Northwest Indiana Index, a research project that accurately gauges the dynamics of the region’s economy while at the same time estimating the probability of an upcoming change in local economic activity.

The index has two components: the Northwest Indiana Coincident Index, which provides a monthly snapshot of the region’s progress; and the Northwest Indiana Leading Index, which forecasts how the Coincident Index will change in the next six months.

A Lilly Sustaining Grant Fellowship funded the research and provided Arshanapalli and Coffin with the assistance of Vicki Urbanik, a student in the business school’s post-baccalaureate certificate program in accounting.

Urbanik has assisted the team by researching the coincident and leading economic indicators that have been developed by other states and regions to collect comparable data.

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