Cyclical episodes from 1970 to 1998

The Committee has identified three cyclical episodes between 1970 and 1998, with peaks and troughs dated as follows:

Table 1. Chronology of euro area business cycles

PEAK	TROUGH
1974q3	1975q1
1980q1	1982q3
1992q1	1993q3

Thus the Committee has identified three recessions:

• 1974q3 to 1975q1
• 1980q1 to 1982q3
• 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. Shaded bands indicate recessions identified by the Dating Committee.

Figure 1 Euro area GDP, 1970-98 (Click to Zoom)

Data on GDP, investment, employment and industrial production for France, Germany and Italy suggest the recessions identified by the Committee have the following characteristics:

• Two of the three recessions – 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 distinctive 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.

More information on these episodes can be found on page 3 of the Committee's 2003 findings [PDF]