ASEM 2018 international annual conference paper business cycles: A statistical process control perspective

David Enck, Mario Beruvides, Victor Gustavo Tercero-Gomez, Lalo Cordero-Franco

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Since the late 1920s economic recessions have been considered part of an overall business cycle analysis with unknown, and variable, amplitude and frequency. The National Bureau of Economic Research formed a Business Cycle Dating Committee in 1978, and since then there has been a formal process of announcing the NBER determination of a peak or trough in economic activity. Over the year’s researchers have focused on predicting the onset of recessions as well as future values of leading indicators of economic performance. A lack of definition of the business cycle has led to variable interpretations of observed economic performance and verbal gymnastics when economists describe the current state of the economy. A number of authors have used Markov Switching, CUSUM charts, Logistic Regression, and Support Vector Machine algorithms to try and predict the onset of a recession. Another extensive area of research has focused on using models to predict economic indicators. These prediction models include: Auto-regression, Factor (Principle Components) Augmented models, and Factor Augmented Auto-regression models. The authors envision a future where economic analyses start with a statement as to whether the economy is operating under common or special cause variation. Once this is determined analyses that are appropriate for the current status can be applied. This paper reviews the state of the art on Business Cycles, how they are quantified currently, define opportunities for partitioning economic indicators into special and common cause variation, and explore the impact of this change and its effects on the research into this area.

Original languageEnglish
Title of host publication39th International Annual Conference of the American Society for Engineering Management, ASEM 2018
Subtitle of host publicationBridging the Gap Between Engineering and Business
PublisherAmerican Society for Engineering Management
Pages716-724
Number of pages9
ISBN (Electronic)9781510874640
StatePublished - 2018
Event39th International Annual Conference of the American Society for Engineering Management: Bridging the Gap Between Engineering and Business, ASEM 2018 - Coeur d�Alene, United States
Duration: Oct 17 2018Oct 20 2018

Publication series

Name39th International Annual Conference of the American Society for Engineering Management, ASEM 2018: Bridging the Gap Between Engineering and Business

Conference

Conference39th International Annual Conference of the American Society for Engineering Management: Bridging the Gap Between Engineering and Business, ASEM 2018
CountryUnited States
CityCoeur d�Alene
Period10/17/1810/20/18

Keywords

  • Business cycles
  • Change points
  • Control charts
  • Statistical process control

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  • Cite this

    Enck, D., Beruvides, M., Tercero-Gomez, V. G., & Cordero-Franco, L. (2018). ASEM 2018 international annual conference paper business cycles: A statistical process control perspective. In 39th International Annual Conference of the American Society for Engineering Management, ASEM 2018: Bridging the Gap Between Engineering and Business (pp. 716-724). (39th International Annual Conference of the American Society for Engineering Management, ASEM 2018: Bridging the Gap Between Engineering and Business). American Society for Engineering Management.