The Business Cycle -- Expansions and Recessions: 1900 - 2007

Now that more investors are beginning to talk recession, below we have graphically summarized US economic expansions and recessions since 1900 (red=recession, green=expansion).

One of the most interesting aspects of the above chart is that over the last one hundred years, recessions have become shorter in nature.  For example, three of the first four recessions during the 20th Century lasted longer than 600 days.  During the last four recessions, however, only one has been longer than 250 days (the longest was 487).

During expansions, we have seen the opposite occur.  Over the last 100+ years, expansions have become longer in duration.  Prior to WWII, there were ten economic expansions.  Of those, only four (40%) lasted longer than 1,000 days.  Since WWII, however, there have been eleven expansions, of which nine (81%) crossed the 1,000 day threshold.

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Comments

[oldprof]

Nice chart. Another observation is that the frequency of recessions is lower over the last twenty-five years or so. As someone who has observed the development of econometric modeling from the early mainframe stage, I think that this improvement is more than a coincidence.

Your results are good to keep in mind when reading opinions by those who look into the distant past for their comparisons.

[eric]

Good post. When you look at long term charts like this it makes you realize how lucky we are to live in the 1980's to now. The economic environment has been extraordinary compared to other eras. Will it last? Time will solve that mystery I guess.

[Beach Boomer]

Hopefully this data bodes well for the recovery from this most recent recession.