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What is a recession?: A reprise

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  • Allan Layton
  • Anirvan Banerji

Abstract

This paper draws its title from a paper written over 35 years ago by Geoffrey H. Moore (1967). Why the need for a reprise? First, there would appear currently to be somewhat diverging views as to what properly constitutes a recession. Second, largely as a result of this, in many countries other than the US, there does not exist a single, widely accepted business cycle chronology for the country in question. This paper will argue that, in addition to output, there are other important aspects to aggregate economic activity that need to be taken into account in determining the business cycle, viz., income, sales and employment. As such, our perspective would seem to be at odds with the apparent position taken by some other recent commentators on this issue who argue that GDP is all that is needed to represent a country's business cycle. We will also argue against using the currently popular 'two negative quarterly growth rate' rule in dating the onset of a recession.

Suggested Citation

  • Allan Layton & Anirvan Banerji, 2003. "What is a recession?: A reprise," Applied Economics, Taylor & Francis Journals, vol. 35(16), pages 1789-1797.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:16:p:1789-1797
    DOI: 10.1080/0003684032000152853
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    References listed on IDEAS

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    1. Michael Artis, 2002. "Dating the Business Cycle in Britain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 182(1), pages 90-95, October.
    2. repec:sae:niesru:v:161:y::i:1:p:84-89 is not listed on IDEAS
    3. Salazar, Eduardo & Smith, Richard & Weale, Martin & Wright, Stephen, 1997. "A Monthly Indicator of GDP," National Institute Economic Review, National Institute of Economic and Social Research, vol. 161, pages 84-89, July.
    4. Don Harding & Adrian Pagan, 1999. "Dissecting the Cycle," Melbourne Institute Working Paper Series wp1999n13, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    5. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1, July.
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    7. Gerhard Bry & Charlotte Boschan, 1971. "Foreword to "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs"," NBER Chapters, in: Cyclical Analysis of Time Series: Selected Procedures and Computer Programs, pages -1, National Bureau of Economic Research, Inc.
    8. Theodore M. Crone, 2000. "A new look at economic indexes for the states in the Third District," Business Review, Federal Reserve Bank of Philadelphia, issue Nov, pages 3-14.
    9. Gerhard Bry & Charlotte Boschan, 1971. "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs," NBER Books, National Bureau of Economic Research, Inc, number bry_71-1, July.
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    11. Eduardo Salazar & Richard Smith & Martin Weale & Stephen Wright, 1997. "A Monthly Indicator of GDP," National Institute Economic Review, National Institute of Economic and Social Research, vol. 161(1), pages 84-89, July.
    12. Allan P. Layton & Anirvan Banerji, 2001. "Dating the Indian Business Cycle: Is Output All That Counts?," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 36(1), pages 231-240, January.
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    Cited by:

    1. Anirvan Banerji & Pami Dua, 2010. "Synchronisation of Recessions in Major Developed and Emerging Economies," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 4(2), pages 197-223, May.
    2. Pami Dua & Anirvan Banerji, 2011. "Predicting Recessions and Slowdowns: A Robust Approach," Working Papers id:4391, eSocialSciences.
    3. Thomas F. Crossley & Hamish Low & Cormac O'Dea, 2013. "Household Consumption through Recent Recessions," Fiscal Studies, Institute for Fiscal Studies, vol. 34(2), pages 203-229, June.
    4. Adél Bosch & Franz Ruch, 2013. "An Alternative Business Cycle Dating Procedure for South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 81(4), pages 491-516, December.
    5. Kathleen Goffey & Andrew Worthington, 2002. "Motor Vehicle Usage Patterns in Australia: A Comparative Analysis of Driver, Vehicle & Purpose Characteristics for Household & Freight Travel," School of Economics and Finance Discussion Papers and Working Papers Series 117, School of Economics and Finance, Queensland University of Technology.
    6. Kian Tehranian, 2023. "Can Machine Learning Catch Economic Recessions Using Economic and Market Sentiments?," Papers 2308.16200, arXiv.org.
    7. Anirvan Banerji & Allan P. Layton & Lakshman Achuthan, 2012. "Dating the ‘world business cycle’," Applied Economics, Taylor & Francis Journals, vol. 44(16), pages 2051-2063, June.
    8. Conor Keegan & Steve Thomas & Charles Normand & Conceição Portela, 2013. "Measuring recession severity and its impact on healthcare expenditure," International Journal of Health Economics and Management, Springer, vol. 13(2), pages 139-155, June.

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