Month after month on a given day the “ifo Geschäftsklimaindex” is being published, commented upon by the Ifo president and picked up by the press. Yesterday was such a day and Clemens Fuest commented “Die Stimmung in den deutschen Chefetagen ist euphorisch” and “„Die deutsche Wirtschaft steht unter Volldampf“” as the index climbed for the 3rd time in a row.
Not everybody shares the belief that the index tells us what it is supposed to but I don’t want to go into the details of this. I just have a humble comment with all due respect. I understand the need to pimp up one’s own products, after all public attention is a scarce good. Commenting it though, as is usually the case, introduces Heisenberg uncertainty making the index not a neutral measurement of the economic process but one of its determining factors.
I wanted to check this out in reality and gauge in some way what the demand for the index is to begin with. In the Ifo Institute’s own words “Das ifo Geschäftsklima ist ein vielbeachteter Frühindikator für die konjunkturelle Entwicklung Deutschlands”. How true is this?
I know of one way to gauge demand for digital documents and that is Google Trends. So when I check for the intensity of search for “ifo Geschäftsklimaindex” or “ifo index” I get similar time series, without pronounced monthly seasonality: and indication of low demand.
You might say that people don’t search for the Ifo Index because they know where to find it but if I look at searches for “Konjunktur” then I have annual seasonality and the Ifo index search interest becomes almost non detectable. This means there is a crowd searching for konjunktur which is not searching for the Ifo Index…
Moreover if I look at the distribution of the searches they come exclusively from Germany
and in fact they come mostly from Bavaria. In East Germany only Berlin is half as interested as Bavaria.
Where in Bavaria do the searches come from?
My point? Ein bisschen Bescheidenheit bitte. If there is interest in the Ifo Index it does not register in Google Search and I do not know of many things which do this…