The duration of acceleration cycle downturns: duration dependence, international dynamics and synchronisation

Abstract

This paper analyses the factors that affect the duration of economic downturns using data for growth (acceleration) cycles for 13 industrialised countries over the period 1950–2018. Our findings show that downturn periods die of old age. We also find that when trading partners are in a downturn, the duration of a country’s downturn is likely to be shorter, a likely outcome of common stabilisation mechanisms or terms of trade changes. Additionally, more open economies are found to experience shorter downturn periods and European Union countries show a higher level of synchronisation than the others. Lastly, trade linkages are found to intensify acceleration cycle synchronisation.