Power law for the duration of recession and prosperity in Latin American countries

REDELICO, FRANCISCO; PROTO, ARACELI

PHYSICA A - STATISTICAL AND THEORETICAL PHYSICS

ELSEVIER SCIENCE BV

Lugar: Amsterdam; Año: 2008 vol. 387 p. 6330 - 6336

0378-4371

Ormerod and Mounfield [P. Ormerod, C. Mounfield, Power law distribution of durationand magnitude of recessions in capitalist economies: Breakdown of scaling, Physica A 293(2001) 573] and Ausloos et al. [M. Ausloos, J. Mikiewicz, M. Sanglier, The durations ofrecession and prosperity: Does their distribution follow a power or an exponential law?Physica A 339 (2004) 548] have independently analyzed the duration of recessions fordeveloped countries through the evolution of the GDP in different time windows. It wasfound that there is a power law governing the duration distribution. We have analyzeddata collected from 19 Latin American countries in order to observe whether such resultsare valid or not for developing countries. The case of prosperity years is also discussed.We observe that the power law of recession time intervals, see Ref. [1], is valid for LatinAmerican countries as well. Thus an interesting point is discovered: the same scaling timeis found in the case of recessions for the three data sets (ca. 1 year), and this could representa universal feature. Other time scale parameters differ significantly from each other.