We analyze whether, and since when, East and West German business cycles are synchronised. We investigate real GDP, unemployment rates and survey data as business cycle indicators and we employ several empirical methods. Overall, we find that the regional business cycles have synchronised over time. GDP-based indicators and survey data show a higher degree of synchronisation than the indicators based on unemployment rates. However, synchronisation among East and West German business cycles seems to have become weaker again recently. Convergence between the East and the West German economies is a very important topic in German policy debates. These differences are much larger than the differences between North and South Germany. However, whether and to what degree regional business cycles are synchronised is still an open question. Even before unification, East and West Germany established a monetary union in July
Business cycle research in marketing: a review and research agenda
In this study, we review the growing marketing literature on how to attenuate or amplify the impact of BC fluctuations. Our discussion focuses on three key aspects: 1 the scope of, and insights from, existing BC research in marketing, 2 advancements in the methods to study various BC phenomena in marketing, and 3 some emerging trends that offer new challenges and opportunities for future BC research in marketing. Marketing research has long overlooked the impact of business cycle BC fluctuations.
An often-used definition of BCs goes back to the classic study of Burns and Mitchell , p. Importantly, these cycles are visible across multiple aggregate economic series such as real Gross Domestic Product GDP , real income, or employment, among others Stock and Watson
GDP reached a peak in the fourth quarter of This was followed by contraction during the first three quarters of and growth since then. In the fourth quarter of , real GDP surpassed the earlier peak. This performance of real GDP is consistent with the other data considered by the committee. Output fell less than employment during the recession and currently is rising faster than employment because of unusual productivity growth.
For more information, see the FAQs at the end of this memo, and also see http: Files containing the data and figures is available from that page as well. Suppose that the current weakness of the economy continues, contrary to current forecasts. How will the NBER decide about turning points?
The NBERs Recession Dating Procedure
But we already knew that we were in a recession that had likely begun around that date. So, why does the NBER’s formal declaration matter? It is no secret that measures of employment fell sharply from February to March. Real inflation-adjusted personal consumption expenditure PCE and real personal income before transfers both peaked in February as well. Official measures of GDP are released only quarterly, but the economic free-fall in late March was enough to pull first-quarter GDP growth down to an annualised rate of And every time its Business Cycle Dating Committee declares a turning point for the US economy, people wonder what took it so long.
Introduction; 2. The model; 3. Empirical results; 4. Out-of-sample forecasting; 5. Key words: business cycle; growth cycle; Markov switching; non-parametric rules. This paper uses several produceres to date and analyse the Brazilian business and growth cycles. In particular, a Markov switching model is fitted to quarterly and annual real production data. The smoothed probabilities of the Markov states are used as predictive rules to define different phases of cyclical fluctuations of real Brazilian production.
The results are compared with different non-parametric rules. All methods implemented yield similar dating and reveal asymmetries across the different states of the Brazilian business and growth cycles, in which slowdowns and recessions are short and abrupt, while high growth phases and expansions are longer and less steep. The resulting dating of the Brazilian economic cycles can be used as a reference point for construction and evaluation of the predictive performance of coincident, leading, or lagging indicators of economic activity.
NBER: It’s Official, U.S. In Recession (analysis and Q&A)
Watson began his talk by reviewing some of the history of how the approach to assigning business cycle dates has evolved over time. The designations of U. Burns and Mitchell then tried to summarize this set of sector-specific dates in terms of episodes during which a large number of indicators moved down together, categorizing series further in terms of whether they were leading and lagging indicators relative to those aggregate tendencies and the degree of procyclicality or countercyclicality of each individual series.
They identified separate turning points for each of a few dozen indicators, and again sought to harmonize these to obtain reference cycle dates. Dating by the NBER Business Cycle Dating Committee gradually evolved into the present focus, in which it is the behavior of aggregate economic indicators that is taken to be the focus of the inquiry. Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity.
My forecast is for U. However a recession is a possibility, and the following describes how NBER differentiates between a “double dip” and a new recession. It is always difficult to tell when a recession has ended, especially with a sluggish recovery. If the economy slides back into recession – a possibility right now – the NBER has to decide if it is a continuation of the previous recession, or if the new period of economic decline is a new separate recession.
This is just a technical question: for those impacted by the recession it makes no difference if it is called a “double dip” or a new recession. We can use the NBER memos from that period to look for clues.
For job seekers, no recovery in sight—Why prospects for job growth and unemployment remain dim
the reference dates of the business cycles. It judges the reference dates troughs as close as possible to those selected by the staff at NBER. It also sets some.
The Great Recession of — created the largest economic upheaval in the United States since the Great Depression of the s. Although economic downturns are a recurring phenomenon, the most recent recession was exceptional in its duration and depth. It was the longest recession since the Great Depression. At eighteen months, from December to June , it exceeded the sixteen-month recessions of — and —; the average period from peak to trough of post—World War II recessions was The Great Recession was also especially severe; both GDP and number of jobs declined by about 6 percent and median family incomes declined by about 8 percent.
The Great Recession was particularly worthy of its name because of the protracted slump in employment that followed even after the recession was officially over, as assessed on the basis of the dating procedure of the National Bureau of Economic Research. As a result, during the Great Recession unemployment rates skyrocketed, housing prices and stock portfolios plummeted, and the lives of millions were disrupted.
By some measures, over 30 million individuals lost their jobs, and the rate of long-term unemployment doubled its historical high Song and von Wachter
Centre for Economic Policy Research
To determine whether the economy of a nation is growing or shrinking in size, economists use a measure of total output called real GDP. Real GDP , short for real gross domestic product, is the total value of all final goods and services produced during a particular year or period, adjusted to eliminate the effects of changes in prices. Let us break that definition up into parts. Many goods and services are purchased for use as inputs in producing something else.
For example, a pizza parlor buys flour to make pizzas.
The National Bureau’s Business Cycle Dating Committee maintains a chronology of U.S. business cycles. The chronology identifies the dates of peaks and troughs.
Unemployment tends to rise quickly, and often remain elevated, during a recession. With the onset of recession as companies face increased costs, stagnant or falling revenue, and increased pressure to service their debts they begin to lay off workers in order to cut costs. The number of unemployed workers across many industries spikes simultaneously, the newly unemployed workers find it difficult to find new jobs during the recession, and the average length of unemployment for workers increases.
Here, we examine this connection of recession and unemployment. A recession occurs when there are two or more consecutive quarters of negative economic growth, as measured by gross domestic product GDP or other indicators of macroeconomic performance including unemployment. In part, the relationship between recession and unemployment is purely a matter of semantics; the official dates of recessions include a rise in unemployment as part of the definition of what constitutes a recession.
For example, these charts illustrate the change in unemployment rates and GDP growth rates during the Great Recession of and During a recession a rash of business failures occurs. Why these business failures happen is explained by various economic theories as a result of negative economic shocks, real resource or credit crunches brought about by previously over-expansionary monetary policy, the collapse of debt-based asset price bubbles, or a negative shift in consumer or business mood.