Economic cycle

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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 ?
Teitelbaum walks his readers through five postwar cycles of boom and bust in the science and engineering workforce, which he argues have been driven to a large extent by political machinations set in motion by labor shortage claims (claims that have been almost universally rejected by economists studying the issue).
MARCUS Tregoning is due to have at least one representative in the William Hill Lincoln at Doncaster on Saturday week with Bronze Angel and Boom And Bust in the frame for the first major handicap of the season.
The feature mile conditions stakes saw a prolonged threeway battle between odds-on favourite Boom And Bust, Bancnuanaheireann and Mister Music, in which none of the three traded at Betfair's minimum price of 1.
BOOM And Bust can surely enjoy his moment in the sun as he dips in class for the Bathwick Tyres Somersetshire Conditions Stakes at Bath.
But the spectacular boom and bust of the housing market during the first decade of the twenty-first century, and millions of foreclosed homeowners, have made it clear that housing is no different from any other asset in its ability to climb and to crash.
Boom and bust banking; the causes and cures of the great recession.
HAYLEY TURNER broke more new ground when driving BOOM AND BUST to an all-the-way totesport Mile victory to register a first career success at Glorious Goodwood.
I have to make sure that I view all our young players with support and not boom and bust.
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.
KIEREN Fallon is an eyecatching booking for Boom And Bust as he makes his handicap debut at Kempton.
KIEREN Fallon does not ride too many horses for Marcus Tregoning so his booking for handicap debutant Boom And Bust is an eyecatching development at Kempton.