Characterisation and Dating of the Tunisian Business Cycle – Using a Non-Parametric Approach

Aim: The study aimed to identify the characteristics of cyclical fluctuations in the Tunisian economy. Methodology: To examine the main characteristics of cyclical fluctuations in the Tunisian economy, the author used the non-parametric method of Harding and Pagan (2003) for the quarterly series of real GDP and by sector over the period from January 2001 to December 2015. Findings: The results of the analysis suggest that the Tunisian business cycle is divided into five recessionary phases, and that certain GDP cycles are marked as minor cycles with average durations ranging from 1.5 to 4 years. Nevertheless, the longest expansion phases were observed in the manufacturing, non-manufacturing and public administration services sectors, with duration of five quarters. The turning points in certain GDP sectors (market and non-market activities and financial services) demonstrate higher peaks and troughs throughout the study period in comparison to aggregate GDP. Implications: The study provides a better understanding of the characteristics of the Tunisian economy by sector in light of the growing global economic crises. Originality/value: This study is important in terms of predicting any slowdown in economic activity with the utmost accuracy in order to mitigate its effects or anticipate recovery periods regarding the recurring global crises. Identifying turning points in the cyclical fluctuations in the Tunisian economy is an essential element in diagnosing economic conditions. Cyclical analysis has become an important decision support tool for decision makers.