A mixed-frequency smooth measure for business conditions

We propose measuring business conditions via estimating a smooth function of time that serves as a common factor for explaining the comovement of economic indicators across the occurred business cycles. This smooth measure is useful for reducing the noises in assessing the state of business conditions, and can be easily established using mixed-frequency indicators and updated in real time. We also conduct an empirical study to show its usefulness in real data. ? 2020, Springer-Verlag GmbH Germany, part of Springer Nature.