Business Cycles and Recessions in the OECD Area

Abstract

Recessions are less frequent (10%), more volatile and less persistent than negative business cycles are (50%). In this article, OECD annual data are used to provide a taxonomy of postwar recessions, showing in particular the frequency, the features and the number of countries involved in major episodes. We shall also implement a simple way for inserting positive (or negative) growth cases into standard business cycle analysis, stressing in particular the importance of recessions for stabilization policies. This applies mostly to fiscal policies that risk otherwise to be more pro-cyclical than normally required.