A Cross Country Comparison of Seasonal Cycles and Business Cycles

In a recent paper Barsky and Miron (1989) examine the seasonal fluctuations in the U. S. economy. They show that the key stylized facts about the business cycle characterize the seasonal cycle as well, and they suggest that the interpretation of many of these stylized facts over the seasonal cycle is easier than interpretation over the business cycle. The reason is that the ultimate sources of seasonal cycles are more readily identifiable than those of business cycles. This paper uses the cross country variation in seasonal patterns to pin down the ultimate sources of seasonal variation more precisely than is possible from examination of U.S. data alone. We conclude that a Christmas shift in preferences and synergies across agents are the key determinants of the seasonal patterns around the world. The paper also establishes that, across developed countries, the key observations about aggregate variables that characterize the business cycle also characterize the seasonal cycle. Thus, the similarity of the seasonal cycle and the business cycle demonstrated by Barsky and Miron (1989) for the united states is a robust stylized fact.