Anirvan Banerji

A framework for measuring international business cycles

Abstract The classical measurement of business cycles, growth cycles, and growth rate cycles lies at the foundation for the understanding of macroeconomic dynamics in open market economies. This essay presents a framework for analyzing and forecasting cyclical behavior in economic activity, employment, and inflation. The framework is extended to foreign trade and important domestic sectors of an economy such as manufacturing, services, and construction. This multidimensional framework, which allows for a more in-depth analysis, serves as a model to be developed on a comparable basis across countries. Business cycle and growth rate cycle reference chronologies, which have been determined for the major economies, are presented in this context.

What is a recession?: A reprise

This paper draws its title from a paper written over 35 years ago by Geoffrey H. Moore (1967). Why the need for a reprise? First, there would appear currently to be somewhat diverging views as to what properly constitutes a recession. Second, largely as a result of this, in many countries other than the US, there does not exist a single, widely accepted business cycle chronology for the country in question. This paper will argue that, in addition to output, there are other important aspects to aggregate economic activity that 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 some other recent commentators on this issue who argue that GDP is all that is needed to represent a countrys business cycle. We will also argue against using the currently popular ‘two negative quarterly growth rate’ rule in dating the onset of a recession.

Synchronisation of Recessions in Major Developed and Emerging Economies

This paper examines various measures of synchronisation of recessions, including clustering of the onset of recession across economies, proportion of economies in expansion and the diffusion index of international coincident indexes, and shows that the recent global recession is possibly the most concerted in the post-world-war period. Factors that contributed to the synchronisation and severity of the recession, such as trade and financial linkages and timing of policy actions, are analysed.

Dating the 'world business cycle'

By mid-2008 the world was witnessing the unfolding of a relatively rare macroeconomic phenomenon, namely, the onset of what one might call a synchronized international – or ‘world’ – recession. But what exactly is a ‘synchronized world recession’? This article proposes a practical definition of a ‘synchronized world recession’ and a putative set of historical post-WWII dates for a ‘world business cycle chronology’. Further, using a constructed ‘world coincident index of economic indicators’ and an associated ‘world leading index of economic indicators’, this article demonstrates that evidence was available from early in the second half of 2007 that the world was indeed sliding inexorably towards its fourth synchronized world recession since WWII (although, interestingly, already its second of the twenty-first century!).

Dynamic Decision Making in Marketing Channels

In traditional channels, orders flow upstream and shipments move downstream (as, for example in Figure 1).

The Yo-Yo Years

Is the current recession disguising a longer-term trend toward slower yet more volatile economic growth? The authors believe that it is, with profound implications for government policies.

Predicting Indian Business Cycles: Leading Indices for External and Domestic Sectors

This paper evaluates the real-time performance of the Delhi School of Economics-Economic Cycle Research Institute (DSE-ECRI) Indian Leading Index for exports for predicting cyclical swings in Indian exports growth. The index comprises the 36-country real effective exchange rate and leading indices of Indias 17 major trading partners. Leading indices of Indias major trading partners were developed at the Economic Cycle Research Institute and forecast the onset and end of recessions in overall economic activity in these economies. The results show that the real-time performance of the leading index of Indian exports has been creditable in the last seven years since its construction in 2001. In conjunction with the DSE-ECRI Indian Leading Index, designed to monitor the domestic economy, the exports leading index forms a sound foundation for a pioneering effort to monitor Indian economic cycles.

The “Subpar” Recovery: A Long-standing Misunderstanding

Is the slow growth recovery and expansion a break from past patterns? These two economists argue that it is consistent with a long-term trend toward slower growth that started in the 1970s. It is not likely that rapid economic growth will return anytime soon.

Cyclical Misconceptions Driving Policy Mistakes: Keys to the Productivity Puzzle

The authors see little reason for a rebound in productivity growth, which has downshifted in part due to policies rooted in overly optimistic assumptions about trend growth, and mistaken notions about business cycle dynamics. If they are right, slow trend growth will prevail for the foreseeable future.