Dating the world business cycle
This is used to extract the NBER-suggested frequencies from two to eight years.To this filtered cyclical component, we apply the dating algorithm developed by Bry and Boschan, 1971.All key materials have been released into the public domain.In addition to a paper web page, we have a system web page which gives a file with dates at a fixed URL and can be used e.g. The graph above shows the familiar series of seasonally adjusted annualised growth, of the net sales of non-financial non-oil firms, with shaded bars showing downturns.In the Indian setting, several papers have worked on the problem of identifying dates of turning points of the business cycle (Dua and Banerji, 2000, Chitre, 2001, Patnaik and Sharma, 2002, Mohanty et.al, 2003).
From an Indian policy perspective, this agenda is sketched in Shah and Patnaik (2010).
The starting point of all these glamorous things, however, is measurement.
The major barrier to doing Indian macroeconomics is the lack of the foundations of business cycle measurement.
It is well known that the economy was weakening well before the Lehman bankruptcy in September 2008.
As an example, INR started depreciating sharply from January 2008 onwards. Apr-May-Jun 2007, growth was good but the business cycle was about to turn.
As an example, the standard operating procedure when drawing the chart of a macroeconomic time-series is to show a shaded background for the period which was a contraction.