Nowcasting business cycles using transportation index

Today's relationship between financial market and real economy is one of the main topic in scientific debate in the field of many different approaches. It is practically impossible separate economics science from others disciplines, like psychology, human behavior, philosophy, ethic and etc. Financial markets after losing the Gold standard in 1970 exploited to enormous amount, very active monetary policy in USA, EU and Japan last few years made the situation even more complicated. Some economist see current situation in financial markets as normal, their argument is that expansive monetary policy increasing liquidity in financial market and provide efficient recourse allocation in real economy. On the other hand, such intensive policy could lead to misallocation of recourses, high cyclical fluctuations and even possibility for hyperinflation. For the real business society it is very important to have a reliable forecasting tools to identify current phase of a business cycle. Because of the complexity financial instruments and difficult economical situation today instead of forecasting it is useful to have real-time and reliable data, that might identify current stage of a business cycle. There are different scientific opinions, that some financial indicators have power to predict market action, one of them is transportation sector. The research object of this article is possibility of identification a business cycle phase using transportation index providing readers with understanding of nowcasting approach regarding regional heterogeneity using transportation index.