IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Power law distribution of the duration and magnitude of recessions in capitalist economies: breakdown of scaling

  • Ormerod, Paul
  • Mounfield, Craig

Power law distributions of macroscopic observables are ubiquitous in both the natural and social sciences. They are indicative of correlated, cooperative phenomena between groups of interacting agents at the microscopic level. In this paper, we argue that when one is considering aggregate macroeconomic data (annual growth rates in real per capita GDP in the seventeen leading capitalist economies from 1870 through to 1994) the magnitude and duration of recessions over the business cycle do indeed follow power law like behaviour for a significant proportion of the data (demonstrating the existence of cooperative phenomena amongst economic agents). Crucially, however, there are systematic deviations from this behaviour when one considers the frequency of occurrence of large recessions. Under these circumstances the power law scaling breaks down. It is argued that it is the adaptive behaviour of the agents (their ability to recognise the changing economic environment) which modifies their cooperative behaviour.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.

Volume (Year): 293 (2001)
Issue (Month): 3 ()
Pages: 573-582

in new window

Handle: RePEc:eee:phsmap:v:293:y:2001:i:3:p:573-582
Contact details of provider: Web page:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:293:y:2001:i:3:p:573-582. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.