Expansion

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DEFINITION of 'Expansion'

The phase of the business cycle when the economy moves from a trough to a peak. It is a period when business activity surges and gross domestic product expands until it reaches a peak.

Also known as an "economic recovery."

INVESTOPEDIA EXPLAINS'Expansion'

An expansion is one of two basic business cycle phases. The other is contraction. The transition from expansion to contraction is termed a "peak" and the changeover from contraction to expansion is a trough. Expansions last on average about three to four years but have been known to last anywhere from 12 months to more than 10 years. Much of the 60s was a time of expansion which lasted almost nine years.

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