Sunday, August 24, 2014

Will The Sunspot Cycle Bring The Economy And Market Down With It?

Source: http://www.sidc.be/silso/predisccm

Source: NASA/Hathaway/ARC

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Sunspots, unemployment, and recessions, or Can the solar activity cycle shape the business cycle? (by Mikhail Gorbanev, 2012)

This paper explores the correlation between the solar activity cycles (as measured by the number of sunspots on the sun surface) and the timing of recessions in the US and other economies. It finds out that the probability of recessions in G7 countries greatly increased around and after the solar maximums, suggesting that they can cause deterioration in business conditions and trigger recessions. This opens new approach for projecting recessions, which can be applied and tested with regard to the next solar maximum in 2013.

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