On the Detection of Business Cycles Asymmetry in 22 Countries, 1870-1994

Business cycle asymmetry is examined using annual observations on GDP for 22 economies over the period 1870 to 1994. The present paper extends recent research in a number of ways. First, a non-parametric testing procedure is adopted which is robust to outliers. Second, alternative methods of filtering are considered as methods of deriving the underlying cyclical component of GDP for each of the economies examined. Finally, split samples are analyzed in addition to the long-run sample. In comparison to previous research, more widespread evidence of business cycle asymmetry is detected. Interestingly, it is found that analysis of the whole sample masks variation in the properties of the GDP for the alternative economies in the pre- and post-World War II periods. More precisely, it is found that although little evidence of asymmetry is present in the period to 1945, extensive asymmetry is present after 1945.