PREDICTING RECESSIONS AND SLOWDOWNS A ROBUST APPROACH.pdfVIP

CDE August 2011 PREDICTING RECESSIONS AND SLOWDOWNS: A ROBUST APPROACH ANIRVAN BANERJI Email: anirvan@ Economic Cycle Research Institute (ECRI) New York PAMI DUA Email: dua@ Department of Economics Delhi School of Economics University of Delhi Working Paper No. 202 Centre for Development Economics Department of Economics, Delhi School of Economics Predicting Recessions and Slowdowns: A Robust Approach Anirvan Banerji Economic Cycle Research Institute (ECRI), New York and Pami Dua Department of Economics, Delhi School of Economics and ECRI, New York Abstract This paper defines business and growth rate cycles and describes the importance of key coincident indicators and reference chronologies, following reflections on the definition of a recession. The robustness of turning point forecasts based on the indicator approach to business and growth rate cycles is discussed. Since economies undergo structural changes over the course of a business cycle, and rapid structural changes are characteristic of developing economies in particular, practical methods for the analysis and predict