%0 Journal Article
	%A I. Lolic and  P. Soric and  M. Cizmesija
	%D 2015
	%J International Journal of Economics and Management Engineering
	%B World Academy of Science, Engineering and Technology
	%I Open Science Index 104, 2015
	%T Redefining the Croatian Economic Sentiment Indicator
	%U https://publications.waset.org/pdf/10001946
	%V 104
	%X Based on Business and Consumer Survey (BCS) data,
the European Commission (EC) regularly publishes the monthly
Economic Sentiment Indicator (ESI) for each EU member state. ESI
is conceptualized as a leading indicator, aimed ad tracking the overall
economic activity. In calculating ESI, the EC employs arbitrarily
chosen weights on 15 BCS response balances. This paper raises the
predictive quality of ESI by applying nonlinear programming to find
such weights that maximize the correlation coefficient of ESI and
year-on-year GDP growth. The obtained results show that the highest
weights are assigned to the response balances of industrial sector
questions, followed by questions from the retail trade sector. This
comes as no surprise since the existing literature shows that the
industrial production is a plausible proxy for the overall Croatian
economic activity and since Croatian GDP is largely influenced by
the aggregate personal consumption.
	%P 2751 - 2754