Business Cycle Properties of Firm Data Classified by Size : A Burns-Mitchell Analysis (Unternehmensgrößenklassen im ifo-Konjunkturtest: Eine Burns-Mitchell-Analyse)

We use firm data classified by size to study business cycle properties for German manufacturing. We find that a Burns-Mitchell analysis of disaggregated data reveals some interesting features which are averaged out in the aggregate data. In particular, business expectations are more reliable in forecasting troughs than in forecasting peaks. Moreover, data from small and medium sized firms are better in forecasting troughs than data from large firms, while for peaks the reverse is true. The business expectations of small and medium sized firms have a larger correlation with employment fluctuations than do the expectations of large enterprises