I was expecting to find something about Economics Cycles in this chapter, but I didn’t. I think it will be interested to know about it though.
The concept of Economic Cycles, which are sometimes referred to as Business Cycles, is a theory that attempts to explain changes in economic activity that vary from a long term growth trend as observed in a developed market economy. Factors considered in defining an economic cycle include growth of GDP, household income, employment rates, etc. Economic Cycles are divided into two main categories: booms and recessions. Booms are associated with a strong economy, while recessions are characterized by below-trend economic growth. The National Bureau of Economic Research (NBER) is considered the authoritative source in the US that reports the dates of the peaks and troughs that quantify Economic Cycles. NBER defines economic cycles a bit differently than Economic Cycle Theory.
Rather than booms and recessions, it classifies the economy as being in expansion or contraction. Expansion is when several pieces of economic data are improving, and contraction is a decline in the same data. These definitions focus more on the movement of data, whereas the boom/recession definition only refers to the data's position relative to historical averages.
Key words...(1) expansion, (2) boom, (3) recession, (4)contraction....
ReplyDeleteHow about (5) recovery?
Recovery:
Phase in an economic cycle where employment and output begin to rise to their normal levels after a recession or slump.
Thanks for sharing this piece of Economic Cycle that is not in the book.
I read a business cycle book and still cannot find out what causes the cycle.
ReplyDeleteDifferent theorys have their own way to solve or explain cycle. However none can answer all questions. Looks like we gonna hear more and more theory of cycle in the future.