The durations of recession and prosperity: What distribution do they follow?

Abstract I study the duration of periods of prosperity and recessions from twenty-one leading economies and determine what distribution is a reasonable and plausible fit for these duration data. The earlier literature has focused on the power law and exponential distributions for these duration data. I consider these two distributions as well as two alternative distributions. However, unlike earlier papers, I use a maximum likelihood framework that estimates and evaluates the fit of each of these candidate distributions as well as allowing for model comparison tests to compare a particular distribution against competing distributions.

• Publication year

  2019

• Venue

  Physica A: Statistical Mechanics and its Applications

• Publication date

  2019-11-15

• Fields of study

  Economics

• Identifiers
  DOI 10.1016/J.PHYSA.2019.04.057
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Power Law Distributions and the Size Distribution of Strikes

  2019cited by this paper
• War Size Distribution: Empirical Regularities Behind Conflicts

  2016cited by this paper
• Do Wealth Distributions Follow Power Laws? Evidence from 'Rich Lists'

  2013cited by this paper
• Risk, recessions and the resilience of the capitalist economies

  2010cited by this paper
• On the Size Distribution of Macroeconomic Disasters

  2009cited by this paper
• Power-Law Distributions in Empirical Data

  2007cited by this paper
• On the Frequency of Severe Terrorist Events

  2006cited by this paper
• Empirical results on the size distribution of business cycle phases

  2004cited by this paper
• A Brief History of Generative Models for Power Law and Lognormal Distributions

  2004cited by this paper
• The durations of recession and prosperity: Does their distribution follow a power or an exponential law?

  2004cited by this paper
• The duration of recessions follows an exponential not a power law

  2003cited by this paper
• Power laws and macroeconomic fluctuations

  2003cited by this paper
• Power law distribution of the duration and magnitude of recessions in capitalist economies: breakdown of scaling

  2001cited by this paper
• Stretched exponential distributions in nature and economy: “fat tails” with characteristic scales

  1998cited by this paper
• Business Cycles: Theory, History, Indicators, and Forecasting

  1993cited by this paper
• Likelihood Ratio Tests for Model Selection and Non-Nested Hypotheses

  1989cited by this paper
• The Statistical Analysis of Failure Time Data

  1980cited by this paper
• ECONOMETRIC METHODS FOR THE DURATION OF UNEMPLOYMENT

  1979cited by this paper
• Measuring Business Cycles.

  1946cited by this paper

• Multiply broken power-law densities as survival functions: An alternative to Pareto and lognormal fits

  2020cites this paper