Economic Cycle

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What is the 'Economic Cycle'

The economic cycle is the natural fluctuation of the economy between periods of expansion (growth) and contraction (recession). Factors such as gross domestic product (GDP), interest rates, levels of employment and consumer spending can help to determine the current stage of the economic cycle.

BREAKING DOWN 'Economic Cycle'

An economy is deemed to be in the expansion stage of the economic cycle when gross domestic product (GDP) is rapidly increasing. During times of expansion, investors seek to purchase companies in technology, capital goods and basic energy. During times of contraction, investors will look to purchase companies such as utilities, financials and healthcare .

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RELATED FAQS
  1. What are the key metrics used to measure the business cycle?

    Learn what key metrics are used to determine if the business cycle is in a period of expansion, contraction, or at a peak ... Read Answer >>
  2. During what stage of the economic cycle should I invest in the drugs sector?

    Learn why the expansionary stage of the economic cycle represents the best time to invest in the pharmaceuticals and biotechnology ... Read Answer >>
  3. What is revenue cycle management?

    Learn more about revenue cycle management and why the healthcare industry in particular has adopted this payment process ... Read Answer >>
  4. How does the stock market affect gross domestic product (GDP)?

    Find out how the stock market affects gross domestic product (GDP) through two different channels: financial conditions and ... Read Answer >>
  5. During what stage of the economic cycle should I invest in the telecommunications ...

    Learn what stage of the economic cycle is the best time to invest in the telecommunications sector and how inflation and ... Read Answer >>
  6. How does the United States government measure economic growth?

    Find out how the Bureau of Labor Statistics and the Bureau of Economic Analysis measure economic growth in the United States ... Read Answer >>
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