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Timely identification of economic contraction and its severity allows policymakers to intervene, and thereby reduce its amplitude and duration.In addition, firms can re-evaluate projections of sales and profits, and the consumers their purchasing and investment plans, based on information on transitions to new business cycle phases. Whether a BCDC should be part of the government, the RBI or an independent research organization with high credibility is debatable.We interpret dates into recession shading data using one of three arbitrary methods.The Committee releases its new findings on 7 August 2017.Most of the recessions identified by the Committee’s procedures consist of two or more quarters of declining real GDP, but declining real GDP is not the only indicator used.As an example, the Committee has identified the period from the first quarter in 1980 to the third quarter in 1982 as a recession, despite the fact that real GDP was growing in some quarters during that episode and that real GDP was higher at the end of the recession than at the beginning.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.

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As a result, the decision regarding the dating of business cycles is not political. See Methodology Does CEPR use a different approach to NBER?See The CEPR and NBER Approaches What data does the Committee use?Business cycles are the short-run fluctuations in aggregate economic activity around its long-run growth path.It is the “ups and downs” in economic activity, defined in terms of periods of expansion or recession.a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales A BCDC maintains a chronology comprising alternating dates of peaks and troughs in economic activity.

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