Nonlinear Business Cycle Dynamics: Cross-country Evidence on the Persistence of Aggregate Shocks.

The authors look for asymmetries in the dynamics of real GDP growth for the G7 countries, using a model by Beaudry and Koop that allows the depth of a recession to influence the rate of growth of output. They find evidence supporting these nonlinearities in four countries, including the United States, but the authors do not find evidence that the asymmetries are common even among the four countries exhibiting asymmetric behavior. A modification of the model to distinguish between the recession and recovery phases of a business cycle does not change this general finding. The asymmetries discovered by Beaudry and Koop do not appear to be common among the G7 nations. Copyright 1997 by Oxford University Press.