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Discussion Paper
Reading the Tea Leaves of the U.S. Business Cycle—Part One
The study of the business cycle—fluctuations in aggregate economic activity between times of widespread expansion and contraction—is one of the foremost pursuits in macroeconomics. But even distinguishing periods of expansion and recession can be challenging. In this post, we discuss different conceptual approaches to dating the business cycle, study their past performance for the U.S. economy, and highlight the informativeness of labor market indicators.
Discussion Paper
Reading the Tea Leaves of the U.S. Business Cycle—Part Two
In our previous post, we presented evidence suggesting that labor market indicators provide the most reliable information for dating the U.S. business cycle. In this post, we further develop the case. In fact, the unemployment rate has provided an almost perfect record of distinguishing the beginning of recessions in the post-war U.S. economy. We also show that using more granular labor market data, such as by region or industry, also provides valuable information about the state of the business cycle.