Forecasting of the economic crisis using business cycles patterns

The current global economic crisis has brought to the forefront of scientific research the issues of business cycles, particularly highlighting signals that predict ruptures in the normal dynamics of macroeconomic fluctuations. In this sense a very important concern for the specialists relates to the identification of instruments capable of describing business cycles as accurately as possible. The problem is quite complicated because of the irregular (duration and amplitude) and asymmetric (by comparing recessionary gaps to inflation gaps) shapes. A very effective tool used for this purpose is the random recursive algorithm BBQ of James Engel. The authors aim to test the validity of this algorithm for the Romanian economy using monthly frequency data from 1991:01- 2012:05 period for the industrial production in order to identify specific characteristics of the business cycle.