Power law for the duration of recession and prosperity in Latin American countries

Ormerod and Mounfield [P. Ormerod, C. Mounfield, Power law distribution of duration and magnitude of recessions in capitalist economies: Breakdown of scaling, Physica A 293 (2001) 573] and Ausloos et al. [M. Ausloos, J. Mikievvicz, M. Sanglier, The durations of recession and prosperity: Does their distribution follow a power or an exponential law? Physica A 339 (2004) 548] have independently analyzed the duration of recessions for developed countries through the evolution of the GDP in different time windows. It was found that there is a power law governing the duration distribution. We have analyzed data collected from 19 Latin American countries in order to observe whether such results are valid or not for developing countries. The case of prosperity years is also discussed. We observe that the power law of recession time intervals, see Ref. [1], is valid for Latin American countries as well. Thus an interesting point is discovered: the same scaling time is found in the case of recessions for the three data sets (ca. 1 year), and this could represent a universal feature. Other time scale parameters differ significantly from each other. (C) 2008 Elsevier B.V. All rights reserved.