The durations of recession and prosperity: does their distribution follow a power or an exponential law?
AbstractFollowing findings by Ormerod and Mounfield, Wright rises the problem whether a power or an exponential law describes the distribution of occurrences of economic recession periods. In order to clarify the controversy a different set of GDP data is hereby examined. The conclusion about a power law distribution of recession periods seems better though the matter is not entirely settled. The case of prosperity duration is also studied and is found to follow a power law. Universal but also non universal features between recession and prosperity cases are emphasized. Considering that the economy is basically a bistable (recession/prosperity) system we may derive a characteristic (de)stabilisation time.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number cond-mat/0403143.
Date of creation: Mar 2004
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Publication status: Published in Physica A 339 (2004) 548-558
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Other versions of this item:
- Ausloos, Marcel & Miśkiewicz, Janusz & Sanglier, Michèle, 2004. "The durations of recession and prosperity: does their distribution follow a power or an exponential law?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 339(3), pages 548-558.
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