Since the turn of the century, the duration of cyclical swings in economic growth has shortened dramatically. For instance, the U.S. experienced six growth rate cycles in the 14-year period from 1998 through 2012, while the previous six growth rate cycles stretched over 25-years. This shift is in keeping with our yo-yo years thesis, which suggests that developed economies are likely to experience more recessions because of lower trend growth.

ECRI has completed an examination of the shift towards shorter cycles in major developed economies and the global industrial cycle. Our analysis reveals surprising implications based on the combination of these shorter growth rate cycles with the yo-yo years.