How does the National Bureau of Economic Research (NBER), set the recession, peak and trough dates in the U.S. and what data is used as input?
How does the National Bureau of Economic Research (NBER), set the recession, peak and trough dates in the U.S. and what data is used as input?
The business cycle is the wave-like fluctuation in the economy which has mainly four stages such as the economic boom, recession, depression, and recovery. Each stage will come after one another and after the recovery, the economy will move towards the next business cycle. The upward movement is recovery and the peak up point is the economic boom. The downward movement is known as the recession and the lowest point is known as the depression. After the depression, there will be recovery, and so on.
The main body that studies the business cycle fluctuations in the US economy is the National Bureau of Economic Analysis. They maintain a chronology for the business cycles and according to their chronology, the recession in the economy starts when the economy reaches the peak of the economic activities and it ends when the economy reaches the trough. The period between the peak and trough is thus known as the recession and the period between trough and peak is known as the recovery. A recession involves a significant decline in the economic activity in the economy as well as lasts more than 2 months in the economy. Such economic changes are known as recession and while determining the dates of recession, NBER waits to confirm that such an event has occurred and the chronological date will be determined after enough time period to confirm completely that there was recession and then determines the date. The similar will be followed for the determination of dates for the peak and trough dates in the US.
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