Testing Business Cycles Asymmetry in Central and Eastern European Countries


The idea of business cycles asymmetry is not new in economic theory. According to business cycles asymmetry, a country’s economy behaves differently during economic growth periods as compared to economic recession periods. The results achieved by business cycles asymmetry testing are far from unanimous: some are positive, others are negative. Business cycles asymmetry has major econometric implications: business cycles cannot be modeled using linear models. This paper aims to test business cycles asymmetry in Central and Eastern European Countries, where few business cycles analyses, and especially business cycles asymmetry researches, have been conducted. The industrial production index was considered when testing business cycles asymmetry. We estimated business cycles using the Hodrick-Prescott filter and Mills’ test of asymmetry. Mira’s test was also employed to test results reliability. According to our results, business cycles in Central and Eastern European countries are not asymmetric.

Share and Cite:

V. Chirila and C. Chirila, "Testing Business Cycles Asymmetry in Central and Eastern European Countries," Modern Economy, Vol. 3 No. 6, 2012, pp. 713-717. doi: 10.4236/me.2012.36091.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] W. C. Mitchell, “Business Cycles: The Problem and Its Setting,” NBER, New York, 1927.
[2] J. M. Keynes, “The General Theory of Employment, Interest and Money.” Macmillan, London, 1973.
[3] A. F. Burns and W. C. Mitchell, “Measuring Business Cycles,” National Bureau of Economic Research, New York, 1946.
[4] J. Hicks, “A Contribution to the Theory of the Trade Cycle,” Clarendon, Oxford, 1950.
[5] M. D. Boldin, “Should Policy Makers Worry about Asymmetries in the Business Cycle?” Studies in Nonlinear Dynamics and Econometrics, Vol. 3, No. 4, 1999, pp. 203- 220. doi:10.2202/1558-3708.1049
[6] D. E. Sichel, “Business Cycle Asymmetry: A Deeper Look,” Economic Inquiry, Vol. 31, No. 2, 1993, pp. 224- 236. doi:10.1111/j.1465-7295.1993.tb00879.x
[7] J. B. Ramsey and P. Rothman, “Time Irreversibility and Business Cycle Asymmetry,” 1993. http://econ.as.nyu.edu/docs/IO/9389/RR93-39.pdf
[8] A. Peiró, “Are Business Cycles Asymmetric? Some European Evidence,” Applied Economics, Vol. 36, No. 4, 2004, pp. 335-342. doi:10.1080/00036840410001674268
[9] S. N. Nefci, “Are Economic Time Series Asymmetric Over the Business Cycle?” The Journal of Political Economy, Vol. 92, No. 2, 1984, pp. 307-328. doi:10.1086/261226
[10] B. Falk, “Further Evidence on the Asymmetric Behavior of Economic Time Series over the Business Cycle,” Journal of Political Economy, Vol. 94, No. 5, 1986, pp. 1096- 1109. doi:10.1086/261423
[11] T. C. Mills, “Business Cycle Asymmetries and Non-Li- nearities in UK Macroeconomic Time Series,” Ricerche Economiche, Vol. 49, No. 2, 1995, pp. 97-124. doi:10.1016/0035-5054(95)90018-7
[12] M. S. Andreano and G. Savio, “Further Evidence on Busi- ness Cycle Asymmetries in G7 Countries”, Applied Economics, Vol. 34, No. 7, 2002, pp. 895-904. doi:10.1080/00036840110060984
[13] L. Stanca, “Asymmetries and Non-Linearities in Italian Macroeconomic Fluctuations,” Applied Economics, Vol. 31, No. 4, 1999, pp. 483-491. doi:10.1080/000368499324192
[14] A. E. H. Speight, “Testing for Business Cycle Asymmetry: Some International Evidence,” Applied Economics Letters, Vol. 4, No. 10, 1997, pp. 603-606. doi:10.1080/758533282
[15] W. Newey and K. West, “A Simple Positive Semi- Definite Heteroskedasticity and Autocorrelation Consistent Covariance Matrix,” Econometrica, Vol. 55, No. 3, 1987, pp. 703-708. doi:10.2307/1913610
[16] R. Hodrick and E. C. Prescott, “Postwar Business Cycles: An Empirical Investigation,” Journal of Money, Credit and Banking, Vol. 29, No. 1, 1997, pp. 1-16. doi:10.2307/2953682
[17] T. C. Mills, “Business Cycle Asymmetry and Duration Dependence: An International Perspective”, Journal of Applied Statistics, Vol. 28, No. 6, 2001, pp. 713-724. doi:10.1080/02664760120059246
[18] A. Mira, “Distribution-Free Test for Symmetry Based on Bonferroni’s Measure,” Journal of Applied Statistics, Vol. 26, No. 8, 1999, pp. 959-972. doi:10.1080/02664769921963
[19] F. Canova, “Detrending and Business Cycle Facts,” Journal of Monetary Economics,” Elsevier, Vol. 41, No. 3, 1998, pp. 475-512.
[20] J. Rand and F. Tarp, “Business Cycles in Developing Countries: Are They Different ?” World Development, Vol. 30, No. 12, 2002, pp. 2071-2088. doi:10.1016/S0305-750X(02)00124-9

Copyright © 2023 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.