The Classification of Economic Activity into Expansions and Recessions
AbstractThe Business Cycle Dating Committee (BCDC) of the National Bureau of Economic Research provides a historical chronology of business cycle turning points. This paper investigates three central aspects about this chronology: (1) How skillful is the BCDC in classifying economic activity into expansions and recessions? (2) Which indices of business conditions best capture the current but unobservable state of the business cycle? And (3) Which indicators predict future turning points best and at what horizons? We answer each of these questions in detail with methods novel to economics designed to assess classification ability. In the process we clarify several important features of business cycle phenomena.
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Bibliographic InfoPaper provided by University of California, Davis, Department of Economics in its series Working Papers with number 918.
Date of creation: 04 Nov 2009
Date of revision:
business cycle turning points; receiver operating characteristic curve;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
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