Aggregate Economic Activity : Measuring the Unmeasurable

In the Business Cycle Theory (BCT), the concept of aggregate economic activity (AEA) is treated as notional, since it is directly unobservable. A variety of reference time series that are used in the empirical literature does not convincingly justify its usage as a proxy for AEA. In this study, I propose a theoretically plausible definition of AEA that can be empirically measured with ease. AEA is empirically derived from the real GDP measured by the expenditure approach. Further, the essential attributes of the quantitative measure of AEA are elaborated