Prague Economic Papers 2013, 22(2):182-205 | DOI: 10.18267/j.pep.447

The Evaluation of Economic Recession Magnitude: Introduction and Application

Jiøí Mazurek, Elena Mielcová
Silesian University in Opava, School of Business Administration in Karviná, Department of Mathematical Methods in Economics, Univerzitní námìstí 1934/3, 733 40 Karviná (mazurek@opf.slu.cz; mielcova@opf.slu.cz).

We propose a new quantitative recession magnitude scale for measuring recessions' magnitudes ('strength') derived from GDP growth rates during a recession and its duration. Furthermore, we introduce a qualitative scale with four recession categories: minor, major, severe and ultra, where the categories are defined by the magnitude scale. We use both scales to evaluate several well known economic recessions of the 20th and the 21st centuries. We have found that the Great Depression in 1929-1933 and recessions in Russia and Ukraine in the 1990s belong to ultra recessions, while the recent 2007-2009 financial crisis falls mainly into major (EU and Japan) and severe (USA) category.

Keywords: recession, business cycle, financial crisis, recession classification, recession magnitude
JEL classification: B49, E32, O57

Published: January 1, 2013  Show citation

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Mazurek, J., & Mielcová, E. (2013). The Evaluation of Economic Recession Magnitude: Introduction and Application. Prague Economic Papers, 22(2), 182-205. doi: 10.18267/j.pep.447
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