Permanent and transitory components of business cycles
Subtitle: their relative importance and dynamic relationship
By: Chang-Jin Kim, Jeremy Piger, Richard Startz.
Contributors: Piger, Jeremy Max.; Startz, Richard, 1952-
Series: International finance discussion papers ;; no. 703; International finance discussion papers (Online) ;; no. 703.
Publisher: Federal Reserve Board
Published: 2001
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "This paper investigates the relationship between permanent and transitory components of U.S.  recessions in an empirical model allowing for business cycle asymmetry.  Using a common stochastic trend representation for real GNP and consumption, we divide real GNP into permanent and transitory components, the dynamics of which are different in booms vs.  recessions.  We find evidence of substantial asymmetries in postwar recessions, and that both the permanent and transitory component have contributed to these recessions.  We also allow for the timing of switches from boom to recession for the permanent component to be correlated with switches from boom to recession in the transitory component.  The parameter estimates suggest a specific pattern of recessions: switches in the permanent component lead switches in the transitory component both when entering and leaving recessions"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 10/22/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.