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What Is A Recession?: A Reprise

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  • Allan P. Layton
  • Anirvan Banerji

Abstract

This paper draws its title from a paper written over 30 years ago by Geoffrey H. Moore (1967). Why the need for a reprise? First, there would appear currently to be somewhat diverging views – particularly in Australia – as to what properly constitutes a recession. Second, largely as a result of this, in Australia and many other countries other than the US, there is no single widely-accepted business cycle chronology for the country in question. This paper will argue that in addition to an output dimension, there are other important dimensions to aggregate economic activity which 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 other recent Australian commentators on this issue who argue that GDP is all that is needed to represent Australia’s business cycle. We will also argue strongly against using the currently popular ‘two negative quarterly growth rate’ rule in dating the onset of a recession.

Suggested Citation

  • Allan P. Layton & Anirvan Banerji, 2001. "What Is A Recession?: A Reprise," School of Economics and Finance Discussion Papers and Working Papers Series 095, School of Economics and Finance, Queensland University of Technology.
  • Handle: RePEc:qut:dpaper:095
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    File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2001/Allan%20Layton%20-%20No.%2095.pdf
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    References listed on IDEAS

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    1. repec:sae:niesru:v:161:y::i:1:p:84-89 is not listed on IDEAS
    2. 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.
    3. 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.
    4. 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.
    5. Adrian Pagan, 1997. "Towards an Understanding of Some Business Cycle Characteristics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(1), pages 1-15.
    6. 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.
    7. 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.
    8. James H. Stock & Mark W. Watson, 1988. "A Probability Model of The Coincident Economic Indicators," NBER Working Papers 2772, National Bureau of Economic Research, Inc.
    9. 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. Vincent, BODART & Konstantin, KHOLODILIN & Fati, SHADMAN-MEHTA, 2005. "Identifying and Forecasting the Turning Points of the Belgian Business Cycle with Regime-Switching and Logit Models," Discussion Papers (ECON - Département des Sciences Economiques) 2005006, Université catholique de Louvain, Département des Sciences Economiques.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Pami Dua & Anirvan Banerji, 2011. "Predicting Recessions and Slowdowns: A Robust Approach," Working Papers id:4391, eSocialSciences.
    7. Vincent, BODART & Konstantin A., KHOLODILIN & Fati, SHADMAN-MEHTA, 2003. "Dating and Forecasting the Belgian Business Cycle," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    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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