DEFINITION of 'Procyclic'

A condition of positive correlation between the value of a good, a service or an economic indicator and the overall state of the economy. In other words, the value of the good, service or indicator tends to move in the same direction as the economy, growing when the economy grows and declining when the economy declines.


Some examples of procyclic economic indicators are GDP, labor and marginal cost. Most consumer goods are also considered procyclic, because consumers tend to buy more discretionary goods when the economy is in good shape.

Economic indicators can have one of three different relationships to the economy: procyclic, countercyclic (indicator and economy move in opposite directions) or acyclic (indicator has no relation to the health of the economy).

  1. Economy

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  2. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  3. Indicator

    Indicators are statistics used to measure current conditions ...
  4. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  5. Counter-Cyclical Stock

    A type of stock in which the underlying company belongs to an ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in ...
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