The durations of recession and prosperity: does their distribution follow a power or an exponential law?

Marcel Ausloos, Janusz Miskiewicz and Michele Sanglier

Papers from arXiv.org

Abstract: Following findings by Ormerod and Mounfield, Wright rises the problem whether a power or an exponential law describes the distribution of occurrences of economic recession periods. In order to clarify the controversy a different set of GDP data is hereby examined. The conclusion about a power law distribution of recession periods seems better though the matter is not entirely settled. The case of prosperity duration is also studied and is found to follow a power law. Universal but also non universal features between recession and prosperity cases are emphasized. Considering that the economy is basically a bistable (recession/prosperity) system we may derive a characteristic (de)stabilisation time.

Date: 2004-03
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Published in Physica A 339 (2004) 548-558

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Journal Article: The durations of recession and prosperity: does their distribution follow a power or an exponential law? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:cond-mat/0403143

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