In 2002 CEPR established a Business Cycle Dating Committee for the euro area. The task of the Committee is to establish the chronology of the euro area business cycle, by identifying the recessions and expansions of the 11 original euro area member countries from 1970 to 1998, and of the euro area as a whole since 1999.
The Committee met in Paris on 9 October 2013. The decision of the Committee to convene was prompted by positive news stemming from a variety of sources (the European Commission, statistical agencies, forecasting institutions, international organizations, NowCasting.com) about economic activity in the euro area. The objective of this meeting was to determine whether there was enough evidence that the decline in economic activity that started after third quarter of 2011 had ended. The Committee decided that, while it is possible that the recession ended, neither the length nor the strength of the recovery is sufficient, as of 9 October 2013, to declare that the euro area has come out of recession. The Committee released its findings on 19 October.
The Committee had declared on 15 November 2012 that economic activity in the euro area had peaked in the third quarter of 2011 and that the euro area had been in recession since then. The third quarter of 2011 marked the end of an expansion that began in the second quarter of 2009 and lasted 10 quarters. Although output increased 4.03 per cent from trough to peak, this was not enough to bring euro-area GDP back to its pre-financial crisis level: at the end of the expansion in 2011Q3, GDP was about 2% below its previous 2008Q1 peak. You can read the 15 November Press Release here and the corresponding Findings here.
Previous announcements of the Committee can be found here.
Chronology of Euro Area Business Cycles
The Committee has identified nine peak and trough quarters since 1970:
|2011Q3||Peak||15 November 2012||Available here|
|2009Q2||Trough||4 October 2010||Available here|
|2008Q1||Peak||31 March 2009||Available here|
|1993Q3||Trough||22 September 2003||Available here|
|1992Q1||Peak||22 September 2003||Available here|
|1982Q3||Trough||22 September 2003||Available here|
|1980Q1||Peak||22 September 2003||Available here|
|1975Q1||Trough||22 September 2003||Available here|
|1974Q3||Peak||22 September 2003||Available here|
Therefore the euro area expanded until 1974. Since then there have been four complete cyclical episodes (recession followed by expansion) and it is too early to tell whether the recession that started after the third quarter of 2011 has ended.
Periods of recession are indicated in grey, and periods of expansion in white in the figure below.
Note: CEPR Recession shading for quarters follows the trough method used by FRED to compute NBER Recession Inndicators for the United States (see http://research.stlouisfed.org/fred2/series/USREC/downloaddata?cid=32262). It shows a recession from the period following the peak through the trough (i.e. the peak is not included in the recession shading, but the trough is).