Duration Dependence in US Expansions: A Re-Examination of the Evidence

Abstract: It is commonly accepted that economic expansions do not exhibit duration dependence, that is, the probability of an expansion terminating in the near future is thought to be independent of the length of the expansion. When looking at the probability of entering a recession within a year (or 2 years), we find considerable evidence of economically significant duration dependence. This pattern suggests that certain types of macroeconomic vulnerabilities may be accumulating as the expansion ages causing the arrival of a recession to become more likely.