What are “business cycles”?
The term ‘business cycle’ refers to fluctuations of growth and decline in the level of economic activity in an economy relative to its long-term growth trend. The cycle is made up of periods of growth of output (recovery and peak) and periods of relative decline (contraction or recession). These fluctuations in economic growth and decline do not follow any predictable time pattern in terms of enlight or severity. “The National Bureau of Economic Research’s Business Cycle Dating Committee maintains a chronology of the U.S. business cycle. The chronology identifies the dates of peaks and troughs that frame economic recession or expansion. The period from a peak to a trough is a recession and the period from a trough to a peak is an expansion. According to the chronology, the most recent peak occurred in March 2001, ending a record-long expansion that began in 1991. The most recent trough occurred in November 2001, inaugurating an expansion.’ The NBER defines a recession as ‘a significant
