Business cycle

economic boomboomboom and bustbusiness cycleseconomic cyclecyclicaleconomic fluctuationsboom-and-bustboomingbuilding boom
The business cycle, also known as the economic cycle or trade cycle, is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend.wikipedia
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Recession

economic recessioneconomic downturndepression
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).
In economics, a recession is a business cycle contraction when there is a general decline in economic activity.

Cycle

Cycle (disambiguation)cycliccyclical
Despite the often-applied term cycles, these fluctuations in economic activity do not exhibit uniform or predictable periodicity.

Progress and Poverty

In Progress and Poverty (1879), Henry George focused on land's role in crises – particularly land speculation – and proposed a single tax on land as a solution.
It is a treatise on the questions of why poverty accompanies economic and technological progress and why economies exhibit a tendency toward cyclical boom and bust.

Charles Dunoyer

Sismondi's theory of periodic crises was developed into a theory of alternating cycles by Charles Dunoyer, and similar theories, showing signs of influence by Sismondi, were developed by Johann Karl Rodbertus.
Dunoyer gave one of the earliest theories of economic cycle, building on the theory of periodic crises of Jean Charles Léonard de Sismondi and introducing the notion of the economy periodically cycling between two phases.

Henry George

GeorgistGeorgeHenry George O'Shea
In Progress and Poverty (1879), Henry George focused on land's role in crises – particularly land speculation – and proposed a single tax on land as a solution.
The treatise investigates the paradox of increasing inequality and poverty amid economic and technological progress, the cyclic nature of industrialized economies, and the use of rent capture such as land value tax and other anti-monopoly reforms as a remedy for these and other social problems.

Panic of 1825

banking crisisbanking crisis of 1825financial crisis of 1825
Sismondi found vindication in the Panic of 1825, which was the first unarguably international economic crisis, occurring in peacetime.
The panic has been referred to as the first modern economic crisis not attributable to an external event, such as a war, and thus the start of modern economic cycles.

Macroeconomics

macroeconomicmacroeconomistmacroeconomic policy
Some say interest in the different typologies of cycles has waned since the development of modern macroeconomics, which gives little support to the idea of regular periodic cycles.
While macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline: the attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income).

Jean Charles Léonard de Sismondi

SismondiJean de SismondiJean Charles Leonard de Sismondi
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. Contrarily, in the heterodox tradition of Jean Charles Léonard de Sismondi, Clément Juglar, and Marx the recurrent upturns and downturns of the market system are an endogenous characteristic of it.
For the science of economics, his most important contribution was probably his discovery of economic cycles.

Economic growth

growthGDP growthgrowth rate
Short-run variation in economic growth is termed the business cycle.

Kitchin cycle

KitchinKitchin inventory cycleshort business cycle
In case of Kondratiev waves such products correlate with fundamental discoveries implemented in production (inventions which form the technological paradigm: Richard Arkwright's machines, steam engines, industrial use of electricity, computer invention, etc.); Kuznets cycles describe such products as infrastructural components (roadways, transport, utilities, etc.); Juglar cycles may go in parallel with enterprise fixed capital (equipment, machinery, etc.), and Kitchin cycles are characterized by change in the society preferences (tastes) for consumer goods, and time, which is necessary to start the production.
Kitchin cycle is a short business cycle of about 40 months discovered in the 1920s by Joseph Kitchin.

Nikolai Kondratiev

Nikolai KondratieffN. D. KondratievKondratiev
He is best known for proposing the theory that Western capitalist economies have long term (50-to-60-year) cycles of boom followed by depression.

Clément Juglar

Clement JuglarJuglar
Contrarily, in the heterodox tradition of Jean Charles Léonard de Sismondi, Clément Juglar, and Marx the recurrent upturns and downturns of the market system are an endogenous characteristic of it.
He was one of the first to develop an economic theory of business cycles.

Kuznets swing

Kuznets CycleKuznets cyclesKuznets infrastructural investment cycle
In case of Kondratiev waves such products correlate with fundamental discoveries implemented in production (inventions which form the technological paradigm: Richard Arkwright's machines, steam engines, industrial use of electricity, computer invention, etc.); Kuznets cycles describe such products as infrastructural components (roadways, transport, utilities, etc.); Juglar cycles may go in parallel with enterprise fixed capital (equipment, machinery, etc.), and Kitchin cycles are characterized by change in the society preferences (tastes) for consumer goods, and time, which is necessary to start the production.
Kuznets connected these waves with demographic processes, in particular with immigrant inflows/outflows and the changes in construction intensity that they caused, that is why he denoted them as "demographic" or "building" cycles/swings.

Depression (economics)

economic depressiondepressiondepressions
Various regions have experienced prolonged depressions, most dramatically the economic crisis in former Eastern Bloc countries following the end of the Soviet Union in 1991.
It is a more severe economic downturn than a recession, which is a slowdown in economic activity over the course of a normal business cycle.

Joseph Schumpeter

SchumpeterJoseph A. SchumpeterJoseph Alois Schumpeter
Schumpeter's relationships with the ideas of other economists were quite complex in his most important contributions to economic analysis – the theory of business cycles and development.

Great Moderation

The Great ModerationLong Boom
The second declaration was in the early 2000s, following the stability and growth in the 1980s and 1990s in what came to be known as The Great Moderation.
In economics, the Great Moderation is the reduction in the volatility of business cycle fluctuations in developed nations starting in the mid-1980s, compared with the decades before.

Wesley Clair Mitchell

Wesley C. MitchellWesley MitchellMitchell
In 1946, economists Arthur F. Burns and Wesley C. Mitchell provided the now standard definition of business cycles in their book Measuring Business Cycles:
Wesley Clair Mitchell (August 5, 1874 – October 29, 1948) was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades.

Fiscal policy

fiscalfiscal policiesfiscal management
Economic stabilization policy using fiscal policy and monetary policy appeared to have dampened the worst excesses of business cycles, and automatic stabilization due to the aspects of the government's budget also helped mitigate the cycle even without conscious action by policy-makers.
This implies that fiscal policy is used to stabilize the economy over the course of the business cycle.

Karl Marx

MarxMarx, KarlMarxist
Periodic crises in capitalism formed the basis of the theory of Karl Marx, who further claimed that these crises were increasing in severity and, on the basis of which, he predicted a communist revolution.
Marx believed that increasingly severe crises would punctuate this cycle of growth and collapse.

Debt deflation

debt-deflationdeflationary policiesexcess debt can cause a continuing deflation
Nowadays other notable theories are credit-based explanations such as debt deflation and the financial instability hypothesis.
Bank assets fall because of the defaults and because the value of their collateral falls, leading to a surge in bank insolvencies, a reduction in lending and by extension, a reduction in spending: the credit cycle is the cause of the economic cycle.

Say's law

law of marketssupply creates its demandsupply creates its own demand
These may also broadly be classed as "supply-side" and "demand-side" explanations: supply-side explanations may be styled, following Say's law, as arguing that "supply creates its own demand", while demand-side explanations argue that effective demand may fall short of supply, yielding a recession or depression.
Say's law was generally accepted throughout the 19th century, though modified to incorporate the idea of a "boom-and-bust" cycle.

Real business-cycle theory

real business cycle theoryreal business cycleReal business cycles
A common alternative within mainstream economics is real business cycle theory.
Real business-cycle theory (RBC theory) is a class of new classical macroeconomics models in which business-cycle fluctuations to a large extent can be accounted for by real (in contrast to nominal) shocks.

Unemployment

unemployedunemployment ratejob creation
If the economy is operating with less than full employment, i.e., with high unemployment, Keynesian theory states that monetary policy and fiscal policy can have a positive role to play in smoothing the fluctuations of the business cycle.
Its name is derived from the frequent ups and downs in the business cycle, although unemployment can also be persistent as occurred during the Great Depression of the 1930s.

Simon Kuznets

KuznetsKuznets, SimonSimon S. Kuznets
Fitting trend curves to data and analysis of the time series, comparison of theoretical and empirical levels, allowed him to identify medium-term extended cycles of economic activity, which lasted 15–25 years and had an intermediate position between the Kondratyev "long waves" and short business cycles.

Arthur F. Burns

Arthur BurnsArthur Frank BurnsArthur-F.-Burns
In 1946, economists Arthur F. Burns and Wesley C. Mitchell provided the now standard definition of business cycles in their book Measuring Business Cycles:
Beginning in 1933, the academic part of Burns's career focused on the measurement of business cycles, including questions such as the duration of economic expansions, and what economic variables rise during expansions and fall during recessions.