Economic cycle

(redirected from Boom and Bust Cycles)

Economic Cycle

The period of time during which an economy evolves from a state of health to fragility to recession to recovery and back to health. Every capitalist economy has cycles to a greater or lesser extent. However, regulations may be designed to curtail them (or, more accurately, to attempt to maximize the good times while preventing the bad times); this is rarely successful. Factors affecting economic cycles include the level of inflation, the availability of capital, natural disasters, and political events. Some industries are considered countercyclical, meaning that demand for their products remains relatively constant regardless of economic circumstances; some even do better in recessions. Other industries, mainly those considered luxuries, are greatly dependent on economic cycles. An economic cycle is often colloquially called a boom-and-bust cycle.

Economic cycle.

An economic cycle is a period during which a country's economy moves from strength to weakness and back to strength.

This pattern repeats itself regularly, though not on a fixed schedule. The length of the cycle isn't predictable either and may be measured in months or in years.

The cycle is driven by many forces -- including inflation, the money supply, domestic and international politics, and natural events.

In developed countries, the central bank uses its power to influence interest rates and the money supply to prevent dramatic peaks and deep troughs, smoothing the cycle's highs and lows.

This up and down pattern influences all aspects of economic life, including the financial markets. Certain investments or categories of investment that thrive in one phase of the cycle may lose value in another. As a result, in evaluating an investment, you may want to look at how it has fared through a full economic cycle.

References in periodicals archive ?
Dubai's real estate market has come full circle since 2005, having experienced both the boom and bust cycles," said Sudhakar Rao, Managing Director.
Nobody wants to go back to bubble and boom and bust cycles and very sensibly that's part of their report and I agree with that.
ENERGY MARKETS HISTORICALLY drive the country's (and world's) economy, especially in Texas, where the boom and bust cycles of natural resources can drive its housing markets--especially around Midland and Odessa.
The theme of the three-day event, 'Delivering Value through Project Management - Lessons Learned from the Boom and Bust Cycles', emphasises the importance of lessons learned from boom and bust cycles to enhance the value of projects through adopting innovative and collaborative approaches.
PMI-AGC president Mohammed Hammad said the theme of the conference, Delivering Value through Project Management - Lessons Learned from the Boom and Bust Cycles, was carefully crafted to emphasise the importance of lessons learned from boom and bust cycles to enhance the value of projects through adopting innovative and collaborative approaches.
The theme of the conference "Delivering Value and Productivity Through Project Management: Lessons Learned from the Boom and Bust Cycles", has been chosen to emphasize the importance of lessons learned from boom and bust cycles to enhance the value of projects through adopting innovative and collaborative approaches.
The theme of the conference 'Delivering Value and productivity through Project Management: Lessons Learned from the Boom and Bust Cycles', has been chosen to emphasise the importance of lessons learned from boom and bust cycles to enhance the value of projects through adopting innovative and collaborative approaches.
It is the quintessential dry country nomadic bird, moving hundreds of kilometers from one patchily distributed resource to another in response to irregular rain and fire conditions that control the boom and bust cycles.
The state has gone through boom and bust cycles before, but each downturn has been followed by a stronger and more diverse economy," writes senior economist and vice president Mine Yucel.
Many of GM's problems stem from a bad business model in which a supposed automobile manufacturer has made seven times as much profit from lending money than it has from building and selling cars--a model based in large part on the engineered boom and bust cycles of the Fed's own monetary machinations.
These high-performers seek new technologies that can provide a competitive edge, enabling superior financial performance through boom and bust cycles.
That will also help to overcome the boom and bust cycles that plagued the region during the past decade.