Sine Wave


DEFINITION of 'Sine Wave'

An geometric waveform that oscillates (moves up, down or side-to-side) periodically, and is defined by the function y = sin x. In other words, it is an s-shaped, smooth wave that oscillates above and below zero.


The Composite Index of Lagging Indicators, one of three Business Cycle Indicators published by the Conference Board is known to resemble a sine wave since the measures that make up the index (i.e. ratios and interest rates) tend to oscillate between a range of values. For example, inflation is always kept between specified rates and if/once inflation meets or exceeds a specified limit, interest rates will be adjusted to either increase or decrease inflation so it is brought within a target range. Thus, as the rate of inflation increases, decreases or stays the same, interest rates will oscillate up and down to control an undesired rate of inflation.

  1. Inflation

    The rate at which the general level of prices for goods and services ...
  2. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds ...
  4. Federal Open Market Committee - ...

    The branch of the Federal Reserve Board that determines the direction ...
  5. Lagging Indicator

    1. A measurable economic factor that changes after the economy ...
  6. Coincident Indicator

    A metric which shows the current state of economic activity within ...
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