Froogle | Glossary | 'Business Cycle'

The periodic expansion & contraction of economic activity. Economic researchers have identified three over-lapping cycles of approximately 4 years, 10-to-20 years, and 45-to-60 years duration.

Causes of the short-term cycles (average duration = 52 months – as measured by the US National Bureau of Economic Research) are believed to be a combination of:

• money expansion & contraction (monetary theory);

• alternate savings & spending patterns of consumers (consumer confidence theory); and

• alternate expansion & contraction patterns of business inventory (+ business capital investment).

It has also been suggested that the attitudes and perceptions of consumers (and business managers) guide their spending decisions, and thus determine the business cycle (psychological theory).

The longer-term economic cycles are dependent on more fundamental forces (such as growth in labor force and productivity, capital investments, technological innovation, and long-term weather cycles).

user comments

thank you, come again!
Froogle 1.1.1.7

BUSINESS CYCLE

You Might Also Like