Measurement of Business Cycles in Iran



This paper identifies characteristics of business cycles in Iran, applying Hodrick-Prescott (HP) and Band-Pass (BP) filters. Using seasonal and anual data for 1970-2003, it is found that oil income is the key driving factor of business cycles in the Iranian economy. Furthermore, it is indicated that Iran's economy has experienced seven business cycles during this period, in which the economic boom and recession were observed in 17 and 15 years, respectively. The average years of boom exceeds that of recessions, while the range of fluctuations has been higher in recessions. Considering the impact of business cycles on the economy, the above results should be taken note of in macroeconomic policy making process in Iran.
JEL classification: E32,O47