ECONOMIC DEVELOPMENTS AND MONETARY POLICY       Content Page   . The World Economy: Global Upswing . US: Vibrant Pace . Europe: Mixed . Asia: Broad-based Growth ExpectedCorporate Disclosure . Box 15 – Debunking the Deflation Myth in Singapore . International Financial Markets: Broad Recovery Amid Uncertainty . Singapore: Riding the Global Recovery . Box 16 – Exchange Rate and Macroeconomic Volatility . Monetary Policy in an Increasingly Volatile Environment . Strengthening the Monetary Policy Formulation Process . Recent Policy Research and Analysis Against the Backdrop of More Frequent Shocks . Box 17 – Creating an Electronics Leading Index   Box 17 CREATING AN ELECTRONICS LEADING INDEX   Given the importance of the electronics industry to the Singapore economy, the MAS Economic Policy Department has been tracking a series of indicators pertaining to the global electronics industry. We embarked on an empirical study last year to construct a composite electronics leading index (ELI) that can generate quantitative forecasts of domestic electronics production2. The index includes both US and domestic indicators and is able to capture demand and supply dynamics by incorporating information on new orders, shipments, inventories and prices. The development of the ELI possibly represents a first attempt at using rigorous econometric techniques to select the best plausible set of leading indicators, which can be combined to provide a useful assessment of global electronics activity.   2 MAS Staff Paper No. 30 Using Leading Indicators to Forecast the Singapore Electronics Industry.