MEASURING BUSINESS CYCLES - A MODERN PERSPECTIVE

In the first half of this century, special attention was given to two features of the business cycle: the comovement of many individual econ omic series and the different behavior of the economy during expansion s and contractions. Recent theoretical and empirical research has revi ved interest in each attribute separately, and we survey this work. No table empirical contributions are dynamic factor models that have a si ngle common macroeconomic factor and nonlinear regime-switching models of a macroeconomic aggregate. We conduct an empirical synthesis that incorporates both of these features.