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Macro: Unit 1.1 — The Business Cycle
Macro: Unit 1.1 — The Business Cycle
Macro: Unit 1.1 — The Business Cycle
Unemployment and Inflation [1]
This chapter provides an introductory look at the macroeconomic problems of unemployment and inflation. We will study economic growth in greater detail in two weeks when we study chapters 8 and 22 Web.
A peak is when business activity reaches a temporary maximum, unemployment is low, inflation high.. A recession is a decline in total output, unemployment rises and inflation falls.
expansion (recovery) is when output is increasing, unemployment begins to fall and later inflation begins to rise.. Unemployment increases during business cycle recessions and decreases during business cycle expansions (recoveries)
Business Cycle Dating Procedure: Frequently Asked Questions [2]
Business Cycle Dating Procedure: Frequently Asked Questions. Q: What is the basic job of the Business Cycle Dating Committee?
The chronology identifies the dates of peak and trough months in economic activity. The peak is the month in which a variety of economic indicators reach their highest level, followed by a significant decline in economic activity
A: The NBER’s traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee’s view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another
Unemployment and Inflation [3]
This chapter provides an introductory look at the macroeconomic problems of unemployment and inflation. We will study economic growth in greater detail in two weeks when we study chapters 8 and 22 Web.
A peak is when business activity reaches a temporary maximum, unemployment is low, inflation high.. A recession is a decline in total output, unemployment rises and inflation falls.
expansion (recovery) is when output is increasing, unemployment begins to fall and later inflation begins to rise.. Unemployment increases during business cycle recessions and decreases during business cycle expansions (recoveries)
Lesson summary: Business cycles (article) [4]
In this lesson summary review and remind yourself of the key terms, concepts, and graphs related to the business cycle. Topics include the four phases of the business cycle and the relationship between key macroeconomic indicators at different phases of the business cycle.
Every nation’s economy fluctuates between periods of expansion and contraction. These changes are caused by levels of employment, productivity, and the total demand for and supply of the nation’s goods and services
But in the long-run, economic growth can occur, allowing a nation to increase its potential level of output over time.. |business cycle model||a model showing the increases and decreases in a nation’s real GDP over time; this model typically demonstrates an increase in real GDP over the long run, combined with short-run fluctuations in output.|
Business Cycle [5]
A business cycle is a cycle of fluctuations in the Gross Domestic Product (GDP) around its long-term natural growth rate. It explains the expansion and contraction in economic activity that an economy experiences over time.
The time period to complete this sequence is called the length of the business cycle.. A boom is characterized by a period of rapid economic growth whereas a period of relatively stagnated economic growth is a recession
In the diagram above, the straight line in the middle is the steady growth line. Below is a more detailed description of each stage in the business cycle:
Business Cycle and Economic Indicators [6]
Do you know what the best ways are to check out the health of the economy? There are multiple things that can point to how well or how poorly the economy is doing. There are many types of economic indicators and some are seen as more important or more accurate than others
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Do you know what the best ways are to check out the health of the economy? There are multiple things that can point to how well or how poorly the economy is doing. There are many types of economic indicators and some are seen as more important or more accurate than others
Unemployment: The Curse of Joblessness [7]
The number of people at work is generally closely related to whether an economy is growing at a reasonable rate. At the peak of the worldwide recession that began in 2008, the International Labor Office announced that global unemployment reached the highest level on record
It is not a coincidence that the global economy experienced the most severe case of unemployment during the worst economic crisis since the Great Depression. Unemployment is highly dependent on economic activity; in fact, growth and unemployment can be thought of as two sides of the same coin: when economic activity is high, more production happens overall, and more people are needed to produce the higher amount of goods and services
In that sense, unemployment is countercyclical, meaning it rises when economic growth is low and vice versa.. But unemployment does not fall in lockstep with an increase in growth
Business Cycle Dating Procedure: Frequently Asked Questions [8]
Business Cycle Dating Procedure: Frequently Asked Questions. Q: What is the basic job of the Business Cycle Dating Committee?
The chronology identifies the dates of peak and trough months in economic activity. The peak is the month in which a variety of economic indicators reach their highest level, followed by a significant decline in economic activity
A: The NBER’s traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee’s view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another
Household income risk over the business cycle [9]
Published as part of the ECB Economic Bulletin, Issue 6/2019.. Household income and wealth inequality have become more important in explaining the macroeconomy
via balance sheets, credit constraints).[1] At the same time, public interest in the distributional aspects of economic policies has continued to grow. In addition, the increased availability of microdata makes it possible to document relevant microeconomic stylised facts
Evidence suggests that household income risk varies over the business cycle and affects workers unequally. Individual earnings risk may be considered the most direct type of household income risk, before any insurance from social transfers or intra-household resource pooling
Does Unemployment Responsiveness to Output Change Depend on Age, Gender, Education, and the Phase of the Business Cycle? [10]
All articles published by MDPI are made immediately available worldwide under an open access license. permission is required to reuse all or part of the article published by MDPI, including figures and tables
permission provided that the original article is clearly cited. Feature papers represent the most advanced research with significant potential for high impact in the field
future research directions and describes possible research applications.. Feature papers are submitted upon individual invitation or recommendation by the scientific editors and must receive
Chart Book: Tracking the Post-Great Recession Economy [11]
Chart Book: Tracking the Post-Great Recession Economy. Note: The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), the acknowledged arbiter of business-cycle dating, describes a recession as “the period between a peak of economic activity and its subsequent trough, or lowest point…involv[ing] a significant decline in economic activity that is spread across the economy and lasts more than a few months.” An expansion is the period from a trough to its subsequent peak or highest point.
On July 19, 2021, it announced that the trough of the ensuing recession was in April 2020. While the recession was very deep, it was the shortest on record at just two months
On a quarterly basis the NBER dated the previous peak as the fourth quarter of 2019 and the latest trough as the second quarter of 2020.. When President Trump took office in January 2017, he inherited an economy in its 91st month of economic expansion following the end of the Great Recession in June 2009
Sources
- http://www2.harpercollege.edu/mhealy/eco212i/lectures/ch9-18.htm#:~:text=The%20trough%20is%20the%20bottom,its%20highest%2C%20inflation%20is%20low.
- https://www.nber.org/research/business-cycle-dating/business-cycle-dating-procedure-frequently-asked-questions#:~:text=The%20peak%20is%20the%20month,again%20for%20a%20sustained%20period.
- http://www2.harpercollege.edu/mhealy/eco212i/lectures/ch9-18.htm
- https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/economic-iondicators-and-the-business-cycle/business-cycles/a/lesson-summary-business-cycles
- https://corporatefinanceinstitute.com/resources/economics/business-cycle/
- https://www.hellovaia.com/explanations/macroeconomics/economic-performance/business-cycle-and-economic-indicators/
- https://www.imf.org/external/pubs/ft/fandd/basics/unemploy.htm
- https://www.nber.org/research/business-cycle-dating/business-cycle-dating-procedure-frequently-asked-questions
- https://www.ecb.europa.eu/pub/economic-bulletin/focus/2019/html/ecb.ebbox201906_05~6584f264d5.en.html
- https://www.mdpi.com/2227-7099/8/4/98
- https://www.cbpp.org/research/economy/tracking-the-post-great-recession-economy
