Procyclic

AAA

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.

INVESTOPEDIA EXPLAINS 'Procyclic'

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).

RELATED TERMS
  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Job Openings and Labor Turnover ...

    A survey done by the United States Bureau of Labor Statistics ...
  3. Economy

    The large set of inter-related economic production and consumption ...
  4. Counter-Cyclical Stock

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

    An equity security whose price is affected by ups and downs in ...
  6. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
Related Articles
  1. Economics

    Economics Basics

  2. Investing

    The Ups And Downs Of Investing In Cyclical ...

  3. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

  4. Retirement

    Economic Indicators To Know

Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  5. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  6. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
Trading Center