What Are The Basic Features Of Business Cycle?

A business cycle is a swing in total national output, income, and employment, usually lasting for a period of 20 to 10 years, marked by widespread expansion or contraction in most sectors of the economy.

Typically economists divide business cycle into two main phases, recession and expansion. Peaks and troughs mark the turning points of the cycles. The downturn of a business cycle is called a recession, which is often defined as a period of in which real gross domestic product declines for at least two consecutive quarters. The recession begins at a peak and ends at a trough. According to the organization, which dates the beginning and end of business cycles, the National Bureau of Economic Research, the last U.S recession began after the economy peaked in the summer of 1990. This was followed by a brief recession, which ended in March 1991, after which United States enjoyed one of the longest expansions in its history.

Note that the pattern of cycles is irregular. No two business cycles are quite the same. No exact formula, such as might apply to the revolutions of the planets or of a pendulum, can be used to predict the duration and timing of business cycles.

Features of business cycle