The ifo Business Climate Index for Germany and its Applications

The ifo Business Climate Index for Germany consists of two components: the assessment of business situation and the business expectations for the next six months. It is thus a combination of a status quo (situation) with an ex-ante variable (expectations). Likewise, a question referring to a level (situation) is linked to a change variable (expectations). The ifo Business Climate Index is thus a simple version of an overall indicator (Oppenländer and Poser 1989a), in which several survey indicators are combined. Its principal intention is to describe the economic development as compactly as possible.