Summary

Researchers from New Zealand have developed three new measures to evaluate how economies perform during expansions and contractions, comparing actual growth patterns against theoretical steady growth over the same periods.

Key Facts

• Three new measures track the shape of business cycle phases
• The method compares actual growth to theoretical steady growth
• Researchers are from Victoria University of Wellington and partner institutions

Context

Traditional economic analysis often focuses on the duration or depth of business cycle phases. The new approach, developed by researchers at Victoria University of Wellington, Motu Research, and Statistics Research Associates, examines the shape of growth patterns within each phase.

The methodology asks how actual economic growth compares to what steady, consistent quarter-by-quarter growth would have produced over the same time span. This provides additional insight into economic performance beyond simple measures of how long expansions or recessions last.

Sources

• Phys.org