Recent Changes in the U.S. Business Cycle

37 Pages Posted: 23 Oct 2001

See all articles by Marcelle Chauvet

Marcelle Chauvet

University of California Riverside; University of California Riverside

Simon Potter

Peter G. Peterson Institute for International Economics

Multiple version iconThere are 3 versions of this paper

Date Written: April 2001

Abstract

The US business cycle expansion that started in March 1991 is the longest on record. This paper uses statistical techniques to examine whether this expansion is a onetime unique event or whether its length is a result of a change in the stability of the US economy. Bayesian methods are used to estimate a common factor model that allows for structural breaks in the dynamics of a wide range of macroeconomic variables. We find strong evidence that a reduction in volatility is common to the series examined. Further, the reduction in volatility implies that future expansions will be considerably longer than the historical average.

Keywords: Recession, Common Factor, Business Cycle, Bayesian Methods

Suggested Citation

Chauvet, Marcelle and Potter, Simon, Recent Changes in the U.S. Business Cycle (April 2001). Available at SSRN: https://ssrn.com/abstract=288267 or http://dx.doi.org/10.2139/ssrn.288267

Marcelle Chauvet (Contact Author)

University of California Riverside ( email )

Department of Economics
4136 Sproul Hall
Riverside, CA 92527
United States
(951) 827-1587 (Phone)

HOME PAGE: http://sites.google.com/site/marcellechauvet/

University of California Riverside ( email )

Department of Economics
Riverside, CA 92527
United States

HOME PAGE: http://sites.google.com/site/marcellechauvet/

Simon Potter

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
463
Abstract Views
5,035
rank
60,670
PlumX Metrics