The diffusion indices, used by central banks to synthesize information from their surveys, correlate and complement, according to the evidence, the economic cycle reflected in official statistics. Diffusion indices are usually based on the balance of opinions and present response biases due to potential differences in the relative and, in cases, subjective valuation of changes in the variables. The Diffusion at the Margin Index (MDI) corrects for this bias by calculating the balance of responses based on the difference (designo) between the response in each period and the individual average trend over time. However, over time the average responses of each respondent varies, especially in volatile contexts, so past assessments may be modified when compared to this new average, modifying the aggregate index (and the observed cycle amplitude) in past periods. To correct this bias, a fixed-margin diffusion index (FDDI) is proposed, which records the MDI and retains it fixed in each period. The IDMF captures the perception of companies in each period and is invariant to the passage of time (and to the change in the average individual vision). This note introduces the IDMF and compares it with the MDI using qualitative microdata from the BCRA’s Economic Outlook Survey. Both indicators are useful for monitoring the particularly volatile economic cycle observed in Argentina during this period.
