Who is responsible for dating business cycles
The Great Recession (2007-2009), lasted longer than the average recession at nineteen months.
The 2001 recession, which lasted eight months, was thus slightly shorter than the average.The significance of this study resides in highlighting the business cycle anatomy for the most influential economic powers of the world, hence proposing a model which can be extended for another sample of countries in order to assess the transmission of the business cycle and especially the crisis, targeting the prevention or at least to attenuate the results thereof.Figure 5.1 “Phases of the Business Cycle” shows a stylized picture of a typical business cycle.A complete business cycle is defined by the passage from one peak to the next.Because the Business Cycle Dating Committee dates peaks and troughs by specific months, and because real GDP is estimated only on a quarterly basis by the Bureau of Economic Analysis, the committee relies on a variety of other indicators that are published monthly, including real personal income, employment, industrial production, and real wholesale and retail sales.in Figure 5.1 “Phases of the Business Cycle”, an expansion ends and real GDP turns downward.
The point at which an expansion ends and a recession begins is called the peak of the business cycle. Eventually it starts upward again (at time Some economists prefer to break the expansion phase into two parts.
Furthermore, trade was proven to be an important business cycle vector just for some countries, while for the completeness of the study additional variables should be also taken into consideration.
The significance of this study resides in the highlighting of the business cycle synchronization by means of the trade channel for the most influential economic powers of the world.
The results show a clear demarcation among the leaders and the followers, each country playing a different role during each phase of the business cycle.
Furthermore, there is a significant quadratic link between the above mentioned probabilities and the duration of the crisis.
The cycle begins at a peak and continues through a recession, a trough, and an expansion. Here, the first peak occurs at time t1, the trough at time t2, and the next peak at time t3.