Discussion Paper
On the Periodic Structure of the Business Cycle
In this paper, we test whether a regime shift from expansion to recession and vice versa is, ceteris paribus, equally likely throughout the year. If not, then it may, for instance, be less likely to get out of a recession in the middle of the winter than it is, say, in the spring or summer. We make use of Markov switching regime models to test the hypothesis of interest. The evidence is based on the conventional NBER business cycle chronology as well as alternatives to it.