Business Cycle .

December 24, 2020 By Swapnil Suryawanshi

The business cycle, also known as the economic cycle or trade cycle, are the fluctuations of gross domestic product (GDP) around its long-term growth trend. The length of a business cycle is the period of time containing a single boom and contraction in sequence. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms) and periods of relative stagnation or decline (contractions or recessions).

History :

Theory :

Parts of a business cycle

Phases of the business cycle

Actual business cycle

Long term growth of GDP

The first systematic exposition of economic crises, in opposition to the existing theory of economic equilibrium, was the 1819 Nouveaux Principes d’économie politique by Jean Charles Léonard de Sismondi

What are the 4 stages of the business cycle :

The four stages of the economic cycle are also referred to as the business cycle. These four stages are expansion, peak, contraction, and trough. During the expansion phase, the economy experiences relatively rapid growth, interest rates tend to be low, production increases, and inflationary pressures build.

Business cycle with it specific forces in four stages according to Malcolm C. Rorty, 1922

What causes the business cycle :

The business cycle is caused by the forces of supply and demand—the movement of the gross domestic product GDP—the availability of capital, and expectations about the future. This cycle is generally separated into four distinct segments, expansion, peak, contraction, and trough.

How long is the business cycle :

The time from one economic peak to the next, or one recessive trough to the next, is considered a business cycle. From the year 1945 to the year 2009, the NBER defined eleven cycles, with the average cycle lasting a bit over 5-1/2 years.

Business Cycle - The 6 Different Stages of a Business Cycle

What is business cycle and its stages :

Business Cycle Phases

Business cycles are identified as having four distinct phases: expansion, peak, contraction, and trough. An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.

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