Cyclicality and Economic Growth Dynamics: Business Cycles’ Typologization, Dating, and Matching with Oil Price Fluctuations

This paper proposes a quarterly reference dating of the periods of expansion and recession in the Algerian aggregate economy since 2001. First, the study examines business cycles from different angles, drawing on a general typology, dating methodologies, and various measures of cycle characterization. The cycles’ typology provides the conceptual basis for understanding the dynamics of economic activity, while the dating methodology provides a precise analytical framework for identifying and characterizing the different phases of the cycle. Second, to identify the recession and expansion phases of the Algerian business cycle, the paper employs a non-parametric dating methodology by applying the modified Bry-Boschan procedure for quarterly data proposed by Harding and Pagan (2002). The obtained chronology reveals an asymmetric structure, characterized by expansion phases that are longer (10.8 quarters on average) than contraction phases (4.2 quarters on average). Thus, the measurement and the analysis of the cyclicality have highlighted disproportionate characteristics of these contractions, both in terms of amplitude and severity. The average amplitude of contraction phases is significantly higher (0.43 percentage points) than that of expansions (0.12 percentage points). Moreover, the severity of contractions (0.7 percentage points) also exceeds that of expansions (0.46 percentage points). These results show that, although contraction phases are shorter, they have a greater economic impact. Thus, this asymmetry is also substantiated by the Excess Cumulated Movements Index, which has a negative value of -0.47 % for contractions, in contrast to a positive but modest value of 0.05 % for expansions. Finally, one of the most significant findings of this study is the high sensitivity of economic cyclicality to fluctuations in hydrocarbon market prices. This persistent trend, observed throughout the study period, highlights the structural vulnerability of the Algerian economy to external shocks.