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Business Cycle Powerpoint
- 1. • Alternating increases and decreases in economic activity over time • Phases of the business cycle • Peak • Recession • Trough • Expansion The Business Cycle LO1
- 3. U.S. Recessions since 1950 Period Duration, Months Depth (Decline in Real Output) 1953-54 10 -2.6% 1957-58 8 -3.7 1960-61 10 -1.1 1969-70 11 -0.2 1973-75 16 -3.2 1980 6 -2.2 1981-82 16 -2.9 1990-91 8 -1.4 2001 8 -0.4 2007-09 18 -3.7 Source: National Bureau of Economic Research, www.nber.org, and Minneapolis Federal Reserve Bank, www.minneapolisfed.gov. Output data are in 2000 dollars The Business Cycle LO1
Editor's Notes
- Business cycles are alternating increases and decreases in economic activity over time. Each business cycle consists of four phases. A peak is when business activity reaches a temporary maximum with full employment and near-capacity output. A recession is a decline in total output, income, employment, and trade lasting six months or more; this is sometimes referred to as an economic contraction. The trough is the bottom of the recession period. Expansion is when output and employment are recovering and expanding toward the full employment level.
- This figure shows the business cycle. Economists distinguish four phases of the business cycle; the duration and strength of each phase may vary. Additionally, individual cycles vary in duration and intensity. You can see that the long run trend is economic growth.
- The NBER is a nonprofit economic research organization. Within the NBER is the Business Cycle Dating Committee whose job it is to declare the start and the end of recessions in the U.S. They declared that the 2007 recession began in December 2007 and ended in June 2009.