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The Sahm Rule And Predicting The Great Recession Across Oecd Countries

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  • Blanchflower, David G.
  • Bryson, Alex

Abstract

We examine the start date of the Great Recession across OECD countries. The Sahm Rule identifies the start of recession in the US to the beginning of 2008 but in most other OECD countries it identifies the start after that identified by two successive falls in quarterly GDP. We establish our own rule for predicting recession using the fear of unemployment series to predict recession. We show a 10-point rise in the series compared to its previous 12 month low predicted the onset of the Great Recession in both the United States and Europe.

Suggested Citation

  • Blanchflower, David G. & Bryson, Alex, 2023. "The Sahm Rule And Predicting The Great Recession Across Oecd Countries," National Institute Economic Review, National Institute of Economic and Social Research, vol. 264, pages 8-58, May.
    • Handle: RePEc:cup:nierev:v:264:y:2023:i::p:8-58_2
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    References listed on IDEAS

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    1. Nick Palmer & Mark Chandler, 2008. "Labour Force Survey: interim reweighting 2008," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 2(11), pages 36-39, November.
    2. David G. Blanchflower & Chris Shadforth, 2009. "Fear, Unemployment and Migration," Economic Journal, Royal Economic Society, vol. 119(535), pages 136-182, February.
    3. David G. Blanchflower & Alex Bryson, 2021. "The Economics of Walking About and Predicting Unemployment," NBER Working Papers 29172, National Bureau of Economic Research, Inc.
    4. Blanchflower, David G, 1991. "Fear, Unemployment and Pay Flexibility," Economic Journal, Royal Economic Society, vol. 101(406), pages 483-496, May.
    5. Mark Chandler, 2009. "Labour Force Survey: Interim reweighting and annual review of seasonal adjustment, 2009," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 3(12), pages 56-61, December.
    6. Nicholas Palmer & Matthew Hughes, 2008. "Labour Force Survey: interim reweighting 2007," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 2(1), pages 49-53, January.
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    Cited by:

    1. David Blanchflower & Alex Bryson & Jackson Spurling, 2024. "The wage curve after the Great Recession," Economica, London School of Economics and Political Science, vol. 91(362), pages 653-668, April.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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