On quantitative and graphical measures of the severity of New Zealand’s recessions and strength of its expansions

In this paper, the authors develop three measures for the shape of business cycle phases, reflecting excess gains and losses relative to constant quarterly growth across the phase. 

These measures can be seen as representing better or worse economic outcomes during recession and expansion phases relative to constant growth rate paths and, as a consequence, provide summary evaluation measures for such economic outcomes.

Using a phase’s constant quarterly growth rate as the benchmark, the methodology builds on Harding and Pagan (2016) by developing quantitative measures that have useful economic interpretations and are amenable to informative graphical display and analysis.

They give empirical outcomes for New Zealand’s recession and expansion phases.

Citation

Hall, Viv B, C. John McDermott and Peter Thomson. 2026. “On quantitative and graphical measures of the severity of New Zealand’s recessions and strength of its expansions”. Motu Working Paper 26-02. Motu Economic and Public Policy Research. Wellington, New Zealand.