Euro Area Business Cycle Dating Committee

The Committee has identified the following cyclical episodes since 1970, with peaks and troughs dated as follows:

Thus the Committee has identified three recessions: 1974q3 to 1975q1, 1980q1 to 1982q3, and 1992q1 to 1993q3.

Figure 1 shows the level of real GDP (seasonally adjusted) from 1970 to 1998 according to two alternative GDP series constructed by the OECD and the ECB (denoted by FHM - see below). Shaded bands indicate recessions.

For the same period, we also report key series plotted together with GDP: investment (Figure 2) and Employment (Figure 3). Figures 4a-4c, 5a-5c, and 6a-6c plot GDP, investment, employment and industrial production for France, Germany and Italy.

These data underpin the following analysis of the nature of the recessions identified by the Committee:

• Two of the three recessions we have declared - in the 1970s and 1990s - are pronounced and also synchronized across countries and variables. In both periods employment, investment and industrial production declined with GDP.
• The third recession, in the 1980s, exhibits different and specific characteristics. The recession in terms of aggregate output is milder but longer. GDP does not decline sharply but rather stagnates for almost three years. Our dating is thus based on the behaviour of employment and investment which, unlike GDP, declined sharply during the period. In this episode, we also observe more heterogeneity in output dynamics across the three large economies than in the other two recessions. That affects our designation of the date of the trough, in particular.
• As to recent years, the Committee judges that based on currently available data, it would be premature to declare a peak (and hence a subsequent recession). There is still much uncertainty.