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BUSINESS CYCLES
[object Object],[object Object],[object Object],[object Object]
The Phases of the Business Cycle ,[object Object],[object Object],[object Object],[object Object],[object Object]
The Phases of the Business Cycle ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],GDP time Boom Secular growth trend Downturn Upturn Trough Peak
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object]
Limits to the Business Cycles: ,[object Object],[object Object],[object Object],[object Object]
ACCELERATOR & MULTIPLIER: ,[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object]
Multiplier & Accelerator: Sales 1000 1000 2000 3000 3500 3500 3400 machines 10 10 20 30 35 35 34 Induced INV. 0 10 10 5 0 0 Replacement INV. 1 1 1 1 1 0 Total Inv. 1 11 11 6 1 0
Indicators: indicator recovery boom Industrial production. Gradual increase high Commodity prices -do- -do- Cost of production Increases but slower than commodity prices Increase faster than recovery profits satisfactory high
Investment Replacement High Employment Gradual increase Rapid increase Bank loans Liberal High demand for advances Speculation Increases high Inventory stocks Fall Zero Business failures Rare Zero Business expectations Cautious but  optimistic optimistic
Leading Indicators ,[object Object],[object Object]
Indicators: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
 
Indicators: ,[object Object],[object Object]
Procyclical vs countercyclical ,[object Object],[object Object],[object Object],[object Object]
Variables: Pro-cyclical Countercyclical Industrial production Unemployment Commodity prices Inventory stocks Cost of production Business failures Profits Investment Wages Bank loans

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Business+cycles

  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12. Multiplier & Accelerator: Sales 1000 1000 2000 3000 3500 3500 3400 machines 10 10 20 30 35 35 34 Induced INV. 0 10 10 5 0 0 Replacement INV. 1 1 1 1 1 0 Total Inv. 1 11 11 6 1 0
  • 13. Indicators: indicator recovery boom Industrial production. Gradual increase high Commodity prices -do- -do- Cost of production Increases but slower than commodity prices Increase faster than recovery profits satisfactory high
  • 14. Investment Replacement High Employment Gradual increase Rapid increase Bank loans Liberal High demand for advances Speculation Increases high Inventory stocks Fall Zero Business failures Rare Zero Business expectations Cautious but optimistic optimistic
  • 15.
  • 16.
  • 17.  
  • 18.
  • 19.
  • 20. Variables: Pro-cyclical Countercyclical Industrial production Unemployment Commodity prices Inventory stocks Cost of production Business failures Profits Investment Wages Bank loans