Dating Turning Points in the Business Cycle

The author reviews and evaluates procedures for dating peaks and troughs of the business cycle. Five different methods are judged on their historical performance, age of replication, clarity, timeliness, flexibility, and the validity of underlying assumptions. In addition, the author examines the 1990-92 period in detail where two newer dating methods are especially insightful because they use statistically rigorous methods to derive turning point probabilities and, thereby, the inherent uncertainty in the data can be recognized. The author also concludes that additional research is needed on this topic to resolve some important controversies about business-cycle characteristics. Copyright 1994 by University of Chicago Press.

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