Who is responsible for dating business cycles

A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.

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Why doesn’t the Committee accept the two-quarter definition?

The Committee’s procedure for identifying turning points differs from the two-quarter rule in a number of ways.

Most of the research in business cycles is done keeping in mind advanced industrial economies.

The scarcity of research for studies of business cycles in India along with data limitations might be some of the reasons why policymakers in India are not too concerned about this issue. Business cycles are the short-run fluctuations in aggregate economic activity around its long-run growth path.

As another example, the Committee did not declare a recession for 2001 or 2003, even though the data at the time appeared to show a decline in economic activity (though not for two quarters).

Subsequent data revisions have erased these declines.

Business cycles are usually measured by considering the growth rate of real gross domestic product.

Despite the often-applied term cycles, these fluctuations in economic activity do not exhibit uniform or predictable periodicity.

See Data Sources The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP.

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