Methodology

The Committee defines a recession as

“a significant decline in the level of economic activity, spread across the economy of the euro area, usually visible in two or more consecutive quarters of negative growth in GDP, employment and other measures of aggregate economic activity for the euro area as a whole; and reflecting similar developments in most countries.”

A recession begins just after the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is formally in an expansion; between peak and trough it is in a recession. In both cases, growth rates may be very low.

For details of the data used by the Committee, click here

In determining the chronology of the euro area business cycle, the CEPR Committee adopted a definition of a recession similar to that used by the National Bureau of Economic Research (NBER), which has for many years dated the US business cycle. The Committee had to adapt the NBER definition, however, to reflect specific features of the euro area. Read more information on the CEPR and NBER approaches.

The CEPR Committee’s task is significantly different from that of the NBER. The euro area groups together a set of different countries. Although subject to a common monetary policy since 1999, they even now have heterogeneous institutions and policies. Moreover, European statistics are of uneven quality, long time series are not available, and data definitions differ across countries and sources.