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The Regularity of Business Cycles

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  • Victor Zarnowitz

Abstract

Do business cycles have predictable periodicities or are they random walks without past regularities or predictive value? Arguments in support of either position are found in the literature, with no apparent convergence to an agreement. This paper first examines the implications of the NBER chronologies and other findings for the question of the regularity of business cycles. It discusses hypotheses and presents evidence concerning the incidence and coexistence of cycles with different periods. An extension of the analysis covers growth cycles in the United States and other major countries. The paper then considers different models -- linear, nonlinear, endogenous, and exogenous -- for what they have to say about the problem. The regularity of investment cycles and the possible asymmetries in cyclical behavior receive particular attention, and some related data and tests are provided. Our results suggest that business cycles defy simple characterizations: they show a strong tendency to recur and at times even near periodicity, along with great diversity and evolution of phase durations. The age of a phase is not of much help in predicting the date of its end; the regularities are mainly in the dynamics of the developing business conditions.

Suggested Citation

  • Victor Zarnowitz, 1987. "The Regularity of Business Cycles," NBER Working Papers 2381, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2381
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    Cited by:

    1. Francesco Ravazzolo & Joaquin Vespignani, 2020. "World steel production: A new monthly indicator of global real economic activity," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(2), pages 743-766, May.
    2. repec:fgv:epgrbe:v:67:n:1:a:4 is not listed on IDEAS
    3. Issler, Joao Victor & Notini, Hilton & Rodrigues, Claudia & Soares, Ana Flávia, 2013. "Constructing coincident indices of economic activity for the Latin American economy," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 67(1), April.
    4. Miron, Jeffrey A. & Romer, Christina D., 1990. "A New Monthly Index of Industrial Production, 1884–1940," The Journal of Economic History, Cambridge University Press, vol. 50(2), pages 321-337, June.
    5. Victor Zarnowitz, 1991. "What is a Business Cycle?," NBER Working Papers 3863, National Bureau of Economic Research, Inc.
    6. Francesco Ravazzolo & Joaquin L. Vespignani, 2015. "A new monthly indicator of global real economic activity," Globalization Institute Working Papers 244, Federal Reserve Bank of Dallas.
    7. Stefan Gerlach & Rebecca Stuart, 2021. "Commodity Prices and Global Inflation, 1851-1913," IRENE Working Papers 21-07, IRENE Institute of Economic Research.

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