A Spectral Analysis of Business Cycle Patterns in UK Sectoral Output

TL;DR

This paper analyzes UK sectoral output to identify business cycle patterns, distinguishing between white noise and non-white noise processes in the frequency domain, and examines sector-specific features influencing these cycles.

Contribution

It introduces a spectral analysis approach to differentiate business cycle patterns across UK sectors and explores how institutional features impact these cycles.

Findings

Identified sectoral differences in business cycle patterns.

Revealed spectral characteristics distinguishing white noise from non-white noise processes.

Highlighted institutional influences on sectoral cycle behaviors.

Abstract

This paper studies business cycle patterns in UK sectoral output. It analyzes the distinction between white noise processes and their non-white noise counterparts in the frequency domain and further examines the associated features and patterns for the process where white noise conditions are violated. The characteristics of these sectors, arising from their institutional features that may influence business cycles behavior and patterns, are discussed. The study then investigates the output of UK GDP sectors empirically, revealing their similarities and differences in their business cycle patterns.