R.G. Goodwin mentioned that "economists will be led, as natural scientists have been led, to seek in nonlinearities an explanation of the maintenance of oscillation" (Goodwin, Econometrica 19(1), 1951); following this reasoning, we studied business cycles as if they were generated by nonlinear...

We use a nonlinear, nonparametric method to forecast the unemployment rates. We compare these forecasts to several linear and nonlinear parametric methods based on the work of Montgomery et al. (1998) and Carruth et al. (1998). Our main result is that, due to the nonlin-earity in the data...