The Woman Who Dates European Recessions and Expansions

Most of us have heard that a recession is defined by two or more consecutive quarters of decline in real GDP. In fact, this is a simplification. Since 1929, the National Bureau of Economic Research (NBER) has been publishing reports that date American business cycles according to a more sophisticated definition, "a significant decline in economic activity that is spread across the economy and that lasts more than a few months", which takes into account depth, diffusion and duration of the decline and uses more indicators than the mere real GDP. In 1978 a NBER's Business Cycle dating Committee was formed to this purpose.

In 2003 Europe followed, with a Euro Area Business Cycle Dating Committee including economists affiliated to the Centre for Economic Policy Research (CEPR). Antonella Trigari, Associate Professor of Economics at Bocconi and Director of the MSc in Economic and Social Sciences, is one of the five members of the Committee, which publishes two Statements per year, establishing the chronology of recessions and expansions and commenting on the current state of aggregate economic activity in the euro area.

NBER's and CEPR's methodologies slightly differ (CLICK here for an explanatory document), due to the different nature of the United States and the euro area. Although subject to a common monetary policy since 1999, euro area countries even now have heterogeneous institutions and policies. Moreover, European statistics are of uneven quality, long time series are not available, and data definitions differ across countries and sources.

The Committee defines a recession as "a significant decline in the level of economic activity, spread across the economy of the euro area, usually visible in two or more consecutive quarters of negative growth in GDP, employment and other measures of aggregate economic activity for the euro area as a whole." In its Fall Statement (29 September 2020), the Committee stated that the euro area is in recession, the cycle having reached its peak in the last quarter of 2019. "The pace of that now-ended 31-quarter expansion, which had begun in the second quarter of 2013, was the slowest of all euro area recoveries to date," they pointed out.

Professor Trigari has also been appointed, along with Philip Kircher, Program Committee Chair of the EEA 2021 Scientific Committee. The annual conference of the European Economic Association is scheduled in Copenhagen and will be held in presence, distance or in a blended form according to the evolution of the pandemic.