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Sunspots, unemployment, and recessions, or Can the solar activity cycle shape the business cycle?

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  • Gorbanev, Mikhail

Abstract

Over the last 77 years (from 1935), all 7 cyclical maximums of the solar activity overlapped closely with the US recessions, thus predicting (or triggering?) 8 out of 13 recessions officially identified by NBER (including one “double-deep” recession). Over the last 64 years (from 1948), all 6 maximums of the solar activity were preceded by minimums of the US unemployment rate, and the spikes in the unemployment rate followed with lags of 2-3 years. On the world scale, over the last 44 years (for which the data is available), all 4 maximums of the solar activity overlapped with minimums of the unemployment rate in the G7 countries, followed by its spikes within 2-3 years. From 1965, when consistent recession dating is available for all G7 countries, nearly 3/5 of the recessions started in the 3 years around and after the sunspot maximums. Was it a mere coincidence or a part of a broader pattern? This paper explores the correlation between the solar activity cycles (as measured by the number of sunspots on the sun surface) and the timing of recessions in the US and other economies. It finds out that the probability of recessions in G7 countries greatly increased around and after the solar maximums, suggesting that they can cause deterioration in business conditions and trigger recessions. This opens new approach for projecting recessions, which can be applied and tested with regard to the next solar maximum in 2013. Caution: This research is not in the “mainstream” of the economic thought. Read at your own risk!

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  • Gorbanev, Mikhail, 2012. "Sunspots, unemployment, and recessions, or Can the solar activity cycle shape the business cycle?," MPRA Paper 40271, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40271
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    1. Gorbanev, Mikhail, 2015. "Can solar activity influence the occurrence of economic recessions?," MPRA Paper 65502, University Library of Munich, Germany.

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    Keywords

    unemployment; recession; business cycle; sunspot; solar cycle;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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