NAMA : LINDAWATI

NIM : 041482915

Business cycle is the most powerful tool to measure economic performance

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 research 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 with Gross Domestic
Product (GDP) growth data 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 study is the
seasonally adjusted timeseries 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.

In the prosperity business cycle stage, the condition of a country is in good condition. Where the
pace of economic growth is still at a good level and the unemployment rate is also very low. In this stage
of the business cycle, people's purchasing power will certainly increase along with the increase in
people's income. At this stage, consumers also want to use the money they have to get the highest level
of satisfaction for goods and services. From the producer's point of view, the economic condition in this
stage is often exploited by expanding its business and innovating by producing and offering new
products to consumers.
 In doing this you as a business owner must also be able to handle it with the right business
principles and ethics. Of course, at this stage the businessman also experiences many advantages. From
the results of this income you must also calculate any profit in your books.

This is very important to do to help you in making every next business decision. But what if you are so
busy that you don't have time to make financial reports? You don't have to worry. Now you can use the
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