DOI: 10.1140/epjb/e2007-00153-0 THE EUROPEAN PHYSICAL JOURNAL B

Abstract. This paper investigates the statistical properties of within-country gross domestic product (GDP) and industrial production (IP) growth-rate distributions. Many empirical contributions have re-cently pointed out that cross-section growth rates of firms, industries and countries all follow Laplace distributions. In this work, we test whether also within-country, time-series GDP and IP growth rates can be approximated by tent-shaped distributions. We fit output growth rates with the exponential-power (Subbotin) family of densities, which includes as particular cases both Gaussian and Laplace distributions. We find that, for a large number of OECD (Organization for Economic Cooperation and Development) countries including the US, both GDP and IP growth rates are Laplace distributed. Moreover, we show that fat-tailed distributions robustly emerge even after controlling for outliers, autocorrelation and het-eroscedasticity. PACS. 89.65.Gh Economics; econophysics, financial markets, business and management – 89.90.+n Other topics in areas of applied and interdisciplinary physics – 02.60.Ed Interpolation; curve fitting