CHANGES IN SEASONAL PATTERNS - ARE THEY CYCLICAL

This paper explores the hypothesis that the seasonal patterns of macro economic variables vary with expansions and contractions. Graphical te chniques and generalized predictive tests for structural stability are used to identify and test patterns of changing seasonality. A Monte C arlo exercise shows the power of the tests against interesting alterna tives. The empirical results suggest that seasonal patterns are unstab le and that in many cases changes are linked to the stages of the busi ness cycle. The forecasting costs incurred by treating seasonality as constant are discussed and evaluated.