Asymmetric Phase Shifts in U.S. Industrial Production Cycles

Based on the industrial production of 74 U.S. manufacturing industries, we identify the turning points of industry cycles. Industry peaks and troughs are concentrated around national turning points, confirming that the comovement is a salient feature of the business cycle. However, we find a substantial asymmetry in the distribution of turning points: troughs (upturns) are much more concentrated than peaks (downturns). This is in contrast to the conventional notion of a `sudden stop and slow recovery.' We also find that the effects of macroeconomic factors and spillover effects from input-output linkages are asymmetric for the occurrences of industry turning points. While the spillover effects from the other industries are significant only for peaks, the effects of macroeconomic factors are significant for both peaks and troughs.