Business Cycle

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Description of Business Cycle. Explanation.

 

Definition Business Cycle. Description.


A Business Cycle is the pattern that exists in the fluctuations in economic or production activities in an economy.


Such fluctuations appear to occur at more or less regular time intervals (every five years or so). A business cycle typically involves a period of economic growth (an expansion or boom), and a period of relative stagnation or decline (a contraction or recession).

 

Governments and various institutions try to dampen the effects of the business cycle, and get more balanced long-term growth, but so far with limited success.

 

The peak of the business cycle is usually referred to as a boom, and the trough as a recession or depression. Since no two cycles are alike in their details, some economists dispute the existence of cycles and use the word "fluctuations" (or the like) instead.

 

Business cycles of countries can be measured by analyzing their Gross Domestic Product.


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