Business Cycles for G7 and European Countries

Abstract

This article proposes classical business cycle turning points for the G7 and a number of European countries based on industrial production. This enables us to examine the international nature of cyclical movements free from arbitrary assumptions about the trend, In particular, we show that cyclical asymmetry is common, with slopes during declines being generally larger in magnitude than during expansions. A binary measure of association for expansion and contraction regimes indicates a core group of European countries related to each other and apparently linked to the United States and Japan through Germany.