Shorter Recessions and Longer Expansions

^Francis X. Diebold is J.M. Cohen Assistant Professor of Economics at the University of Pennsylvania and a Visiting Scholar at the Federal Reserve Bank of Philadelphia. Glenn D. Rudebusch is an Economist in the Research and Statistics Division at the Board of Governors of the Federal Reserve System. Earlier research, which failed to produce a consensus, focused almost exclusively on business-cycle volatility. Recent research, however, examines business cycles from the different (and complementary) perspective of duration, focusing in particular on the lengths of expansions, contractions, and whole cycles. The duration perspective—unlike its volatility counterpart—reveals striking changes in the nature of postwar business cycles.