Cyclical behavior of the Peruvian economy: 1980–1998

This study examines economic fluctuations in Peru during the period 1980–1998, focusing on a comparison of two data filtering methodologies: the Hodrick and Prescott (H&P) filter and the Christiano and Fitzgerald (C&F) filter. Through a detailed empirical analysis, this study evaluates each filter’s ability to isolate the cyclical component of Gross Domestic Product (GDP) and other economic aggregates, thereby enabling the identification of more precise cyclical patterns and their relationship to periods of economic recession. Using quarterly data, a time-series analysis approach is applied. The results indicate that the C&F method offers a better fit and greater predictability regarding recessions compared to the H&P method, showing cyclical behavior more closely aligned with the historical fluctuations of the Peruvian economy. The suggested implications for economic policy include the need to adopt more robust filtering methodologies for assessing economic cycles and to formulate policies that align with the realities of the observed co-movements in economic variables. (Abstract and audio: Department of Economic Publications)