The phenomenon of double dip recession is seldom discussed theoretically and just as rarely examined empirically. Indeed, the National Bureau of Economic Research does not define this concept and an informal survey of macroeconomics textbooks at both the principles and intermediate levels reveals that the phrase “double-dip recession” appears only twice and is never defined. In an earlier paper presented at the eighty-second International Atlantic Economic Conference, we applied our particular definition of a double-dip recession to real gross domestic product data for fourteen Organisation for Economic Co-operation and Development (OECD) nations. This paper continues that avenue of research with an examination of real gross domestic product (GDP) for eleven additional countries of the world.
Data/Methods
As in our earlier paper, we employ the standard textbook definition of a recession as a decrease of real GDP for two or more consecutive quarters and define a double-dip recession as a decrease of real GDP which begins after the trough of the previous business cycle but prior to the previous peak level of real GDP, which we call the reversion point. With these definitions, we examine quarterly data on real GDP for the time period from 1960 to 2015 for eleven OECD countries ( Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Portugal, Sweden, Switzerland, and Turkey ) for turning points, reversion points and double-dip recessions. By extension, we also examine the data for triple-dip and greater or multi-dip recessions.
Results/Expected Results
This paper finds, similar to our earlier results, that double-dip recessions are fairly common. In particular, double-dip recessions account for fourteen percent of the total number of recessions, ninety-three, for the eleven nations over the examined time period. Those recessions consisting of three or more dips comprise twelve percent of the total number of economic contractions. Stated alternately, seventy-four percent of all recessions documented for this paper were the traditional or single-dip variety.