Recession Detection in Japan using Labor Market Data (opens in new tab)

Recession indicators are often viewed as U.S. specific, raising the question of whether labor market-based rules such as the Sahm Rule and the Michez Rule can reliably detect recessions in other countries. To answer this, we evaluate whether such rules can be adapted to Japan by calibrating thresholds and smoothing parameters to Japanese labor market data. We construct a large set of 95,832 recession indicators combining unemployment and vacancy...