Economic cycle

(redirected from Boom-and-Bust Cycle)

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 ?
This regulation aims to regulate the market to avoid another boom-and-bust cycle.
Dubai: The International Monetary Fund (IMF) has warned Dubai it might need to intervene in its property market to prevent another boom-and-bust cycle of the kind which brought it close to default four years ago.
They also give recommendations on creating a better monetary system and avoiding the boom-and-bust cycle in the future.
NASA Administrator Mike Griffen said that the agency does not have the money to add large numbers of workers, and there is a desire to avoid a boom-and-bust cycle for employees.
Perhaps Oregon has left behind the boom-and-bust cycle that characterized its earlier growth patterns.
During the boom in the early '80s, there were 4,500 rigs operating in the West, but after the bust in '86 there were 488 rigs," said Lewis, putting a historic perspective on Colorado's 100-year boom-and-bust cycle.
If the company goes under, its demise will, in large measure, be a product of the Federal Reserve's engineered boom-and-bust cycle.
They say they want to work together with other stakeholders to tackle the boom-and-bust cycle syndrome in the North, create longterm value-added jobs and arrest the region's declining population.
One of the things that has kept Honda from having to endure the worst of the boom-and-bust cycle that other auto-makers seem to be inextricably tied to is a deep fiscal conservatism that governs its investment in manufacturing.
Whether it's the boom-and-bust cycle of the e-commerce explosion, rampant mergers and restructuring within agribusinesses, or dramatic economic shifts in farming, change borders on religion in the modern workplace.
Many vertebrate species undergo a boom-and-bust cycle like the grouse does, but proving causes has been difficult.
Neither the improvement in vacancies nor higher rentals is likely to support a return to speculative development, as lenders and developers exercise caution to avoid a repeat of the 1980s' boom-and-bust cycle.