Business Cycle
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A Business Cycle is a macroeconomic pattern that represents recurring fluctuations in economic activity across the entire economic system over time periods.
- AKA: Economic Cycle, Boom-Bust Cycle, Trade Cycle.
- Context:
- It can typically consist of four distinct Business Cycle Phases: business cycle expansion phase, business cycle peak phase, business cycle contraction phase, and business cycle trough phase.
- It can typically influence Key Business Cycle Indicators including business cycle GDP, business cycle employment levels, business cycle industrial production, and business cycle retail sales.
- It can typically drive Business Investment Patterns through business cycle confidence effects and business cycle capacity utilization.
- It can typically affect Labor Market Conditions with business cycle job creation during business cycle expansions and business cycle job loss during business cycle contractions.
- It can typically guide Central Bank Policy Responses such as business cycle interest rate adjustments and business cycle monetary stimulus.
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- It can often display Asymmetric Duration with business cycle expansion phases generally lasting longer than business cycle contraction phases.
- It can often create Industry-Specific Impacts with business cycle-sensitive sectors like business cycle construction and business cycle durable goods experiencing greater business cycle volatility.
- It can often trigger Inventory Adjustment Processes where businesses respond to business cycle demand changes through business cycle production changes.
- It can often influence Consumer Behavior Patterns through business cycle sentiment effects and business cycle precautionary saving.
- It can often prompt Government Fiscal Responses like business cycle stimulus spending and business cycle automatic stabilizers.
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- It can range from being a Mild Business Cycle to being a Severe Business Cycle, depending on its amplitude.
- It can range from being a Short Business Cycle to being a Long Business Cycle, depending on its duration.
- It can range from being a Classical Business Cycle to being a Modern Business Cycle, depending on its historical context.
- It can range from being a Supply-Driven Business Cycle to being a Demand-Driven Business Cycle, depending on its primary causal factor.
- It can range from being a Synchronized Business Cycle to being a Desynchronized Business Cycle, depending on its global coordination degree.
- It can range from being a Simple Business Cycle to being a Complex Business Cycle, depending on its causal factor diversity.
- It can range from being a Regular Business Cycle to being an Irregular Business Cycle, depending on its predictability.
- It can range from being a Domestic Business Cycle to being an International Business Cycle, depending on its geographic scope.
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- It can generate Price Level Movements through business cycle inflationary pressures during business cycle booms and business cycle deflationary pressures during business cycle busts.
- It can shape Corporate Profit Trends with business cycle revenue growth and business cycle margin expansion during business cycle upswings.
- It can affect Financial Market Behavior through business cycle risk premium adjustments and business cycle sector rotation.
- It can influence Household Financial Decisions regarding business cycle consumption timing, business cycle debt levels, and business cycle saving rates.
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- Examples:
- Business Cycle Theoretical Frameworks, such as:
- Business Cycle School of Thoughts, such as:
- Classical Business Cycle Theory Schools, such as:
- Keynesian Business Cycle Theory Schools, such as:
- Business Cycle Causal Mechanisms, such as:
- Endogenous Business Cycle Theorys, such as:
- Exogenous Business Cycle Theorys, such as:
- Business Cycle School of Thoughts, such as:
- Business Cycle Classifications, such as:
- Business Cycle Duration Classifications, such as:
- Short-Term Business Cycles, such as:
- Kitchin Business Cycle lasting 3-5 years driven by business cycle inventory adjustment.
- Juglar Business Cycle lasting 7-11 years driven by business cycle fixed investment.
- Long-Term Business Cycles, such as:
- Kuznets Business Cycle lasting 15-25 years driven by business cycle infrastructure investment.
- Kondratieff Business Cycle lasting 45-60 years driven by business cycle technological revolutions.
- Short-Term Business Cycles, such as:
- Business Cycle Severity Classifications, such as:
- Growth Recessions, such as:
- Mild Growth Slowdown Business Cycle characterized by business cycle below-trend growth without business cycle absolute output decline.
- Stagflation Business Cycle featuring business cycle high inflation alongside business cycle economic stagnation.
- Business Cycle Crisis Periods, such as:
- Recession Business Cycle with business cycle significant contraction lasting more than two business cycle quarters.
- Depression Business Cycle involving business cycle severe contraction and business cycle prolonged recovery period.
- Growth Recessions, such as:
- Business Cycle Duration Classifications, such as:
- Business Cycle Historical Examples, such as:
- Pre-World War II Business Cycles, such as:
- Early Industrial Business Cycles, such as:
- Interwar Business Cycles, such as:
- Post-World War I Business Cycle (1918-1921) reflecting business cycle demobilization adjustments and business cycle monetary tightening.
- Great Depression Business Cycle (1929-1939) representing the most business cycle severe contraction in modern business cycle history.
- Post-World War II Business Cycles, such as:
- Golden Age Business Cycles, such as:
- Modern Business Cycles, such as:
- Pre-World War II Business Cycles, such as:
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- Business Cycle Theoretical Frameworks, such as:
- Counter-Examples:
- Structural Economic Change, which represents permanent alterations in economic structure rather than cyclical fluctuations.
- Seasonal Economic Variation, which follows predictable calendar patterns rather than endogenous economic dynamics.
- Random Economic Shock, which occurs unpredictably without exhibiting the systematic patterns of business cycles.
- Market Failure, which refers to inefficient resource allocation in specific markets rather than economy-wide oscillations.
- Secular Stagnation, which describes long-term growth slowdowns rather than regular cyclical patterns.
- See: Gross Domestic Product, Compensation & Benefits Review, Real Versus Nominal Value (Economics), Economic Growth, Recession, Monetary Policy, Fiscal Policy, Economic Indicator.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/business_cycle Retrieved:2014-2-3.
- Template:Economics sidebar
The term business cycle (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in production, trade and economic activity in general over several months or years in an economy organized on free-enterprise principles. [1] The business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around its long-term growth trend. [2]
These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom), and periods of relative stagnation or decline (a contraction or recession).
Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity can prove unpredictable.
- Template:Economics sidebar
- ↑ A. F. Burns and W. C. Mitchell, Measuring business cycles, New York, National Bureau of Economic Research, 1946.
- ↑ Madhani, P. M. (2010).Rebalancing Fixed and Variable Pay in a Sales Organization: A Business Cycle Perspective. Compensation & Benefits Review 42(3), pp. 179–189