Business Cycle
Definition of 'Business Cycle'The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery. At one time, business cycles were thought to be extremely regular, with predictable durations, but today they are widely believed to be irregular, varying in frequency, magnitude and duration. |
|
Investopedia explains 'Business Cycle'Since the World War II, most business cycles have lasted three to five years from peak to peak. The average duration of an expansion is 44.8 months and the average duration of a recession is 11 months. As a comparison, the Great Depression - which saw a decline in economic activity from 1929 to 1933 - lasted 43 months. |
Related Definitions
Articles Of Interest
-
For Higher Stock Returns, Vote Republican Or Democrat?
The president's political party is correlated to market performance. Find out which party tends to outperform. -
Peak-and-Trough Analysis
Prices never move in straight lines, so it's time to learn about this powerful trend-following technique. -
Is Your Personality Preventing Profitable Trades?
Different personality types will trade differently. Where do you fit in? -
Market Cycles: The Key To Maximum Returns
You need to understand the various phases of the market cycle to avoid bubbles and make the best investments. -
Cyclical Versus Non-Cyclical Stocks
Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks. -
Earnings Cyclicality Exposes Profitable Trends
Learn to explore a company's past profits to find today's opportunities. -
Battered Stocks That Bounce Back
Companies with falling revenues can be profitable, but choose them with care. -
Can Financial Education Rebuild America’s Economy?
Find out why financial education will help America to re-establish itself as the world's (undisputed) leading economy. -
Leading Economic Indicators Predict Market Trends
Leading indicators help investors to predict and react to where the market is headed. -
Lessons Learned From the Banking Crisis
There are lessons to be learned on how to handle severe financial downturns, and while the Fed is learning, politicians may not be.
Free Annual Reports