Journal Article


Predicting post-war US recessions: A probit modelling approach

Abstract

This paper investigates the factors associated with the occurrences of US recessions over the period 1963Q1 to 2018Q2 using multivariate probit models. The evidence suggests that the probability of a recession decreases with higher profitability, as implied by the proponents of the Marxian tradition. Equally significant are the results that relate to manufacturing activity, investment, and inflation. The theoretical argument however, of those who regard the burgeoning growth of private credit as a factor triggering recessions, is not supported by our findings. Finally, interest rates, Tobin's Q, and labour's share of income are not statistically significant, hence implying that the likelihood of these being closely associated with US economic recessions is rather slim.

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Authors

Alexiou, Constantinos
Trachanas, Emmanouil

Oxford Brookes departments

Department of Accounting, Finance and Economics

Dates

Year of publication: 2020
Date of RADAR deposit: 2020-04-21


Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License


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