What are the advantages of monitoring indicators? What is the limit on the interpretation?


As the total light score of monitoring indicators and economic growth rate are highly correlated, it can reflect the current economic situation. Additionally, monitoring indicators are simple and easy to understand, thus making it a tool for determining the economic situation used by all sides.

Due to the method used for compiling monitoring indicators, there are two limitations to note during interpretation and use:

(1)  The total light score may happen to cross the threshold when there are slight fluctuations around check points, which may result in overall light changes (e.g. When the score of 16 increases to 17, the overall light turns from blue to yellow-blue). When this happens, it does not necessarily mean a significant change in the economic cycle has taken place.

(2)  Although annual rates of individual components differ for the better or worth, as long as the amplitude of change does not exceed the threshold, the same light will still be shown, and the determined score will not change.

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