Nonlinear Business Cycle Dynamics: Cross-Country Evidence on the Persistence of Aggregate Shocks

Economic Inquiry, Volume XXXV, Number 3, July 1997

Posted: 25 Mar 1998

See all articles by Michael Bradley

Michael Bradley

Duke University - Fuqua School of Business

Dennis W. Jansen

Texas A&M University - Department of Economics

Abstract

We look for asymmetries in the dynamics of real GDP growth for the G7 countries, using a model by Beaudry and Koop that allows the depth of a recession to influence the rate of growth of output. We find evidence supporting these nonlinearities in four countries, including the United States, but we do not find evidence that the asymmetries are common even among the four countries exhibiting asymmetric behavior. A modification of the model to distinguish between the recession and recovery phases of a business cycle does not change this general finding. The asymmetries discovered by Beaudry and Koop do not appear to be common among the G7 nations.

JEL Classification: E32

Suggested Citation

Bradley, Michael and Jansen, Dennis W., Nonlinear Business Cycle Dynamics: Cross-Country Evidence on the Persistence of Aggregate Shocks. Economic Inquiry, Volume XXXV, Number 3, July 1997, Available at SSRN: https://ssrn.com/abstract=60931

Michael Bradley

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-8006 (Phone)
919-660-7971 (Fax)

Dennis W. Jansen

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States
409-845-7358 (Phone)
409-847-8757 (Fax)

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