Some International Evidence on Double-Dip Recession

Abstract

With quarterly data on real gross domestic product for 21 nations from the Organization for Economic Co-operation and Development, this paper investigates the relatively neglected concept of double-dip recession. For this paper, a double-dip recession is defined as a second decline of real gross domestic product (GDP) after a trough of the economic cycle but prior to the reversion point or the previous peak level of real GDP. We find that while traditional or single-dip recessions constitute the majority of the recessions found for this paper, double-dip recessions are rather common occurrences across the world. However, higher-order multi-dip recessions, with three or more declines of real GDP before the reversion point is attained, are considerably less prevalent. We also find evidence of what we term trough-deepening multi-dip recessions.