Joint Statistical Meetings - Business strongEconomicstrong Statistics.pdfVIP

Joint Statistical Meetings - Business Economic Statistics Section Time Series Decomposition and Measurement of Business Cycles, Trends and Growth Cycles Victor Zarnowitz and Ataman Ozyildirim The Conference Board, 845 Third Avenue, New York, NY 10022 Keywords: time series decomposition; indicators; business macroeconomic activity have long attracted considerable cycles; trends public and professional concern. These “growth cycles” can be measured as fluctuations in the deviations of the principal * 1. Background, Motivation and Plan of This Study indicators around their generally rising trends. So trend estimation, which is not needed for business cycle analysis, Recent empirical research on business cycles devotes much cannot be avoided in growth cycle analysis.1 attention to time series adjusted for long-term growth trends. Clearly, all recessions involve slowdowns, but not all This is in contrast to the early studies which defined business slowdowns involve recessions; hence, growth cycles are more cycles as sequences of expansions and contractions in a large numerous than business cycles. Of course, the two sets of array of series representing the levels of total out