economy is never in a state of rest.In place of prosperity comes a crisis or panic.Drop the national income, employment and production.Workers are on the streets, significantly reduced profits.When the whole process, eventually reaches a critical point, recovery starts.The update can be both slow and fast, and incomplete and complete.A new wave of prosperity entails a steady level of buoyant demand, a large number of vacancies, higher prices and living standards.Or, on the contrary, it may be rapid inflation, the growth of speculation and the emergence of a new crisis.
This overall picture, representing the cyclical economic development.It is typical for the economy of the industrialized countries over the past seventy years.
Reasons cyclical development of the economy should be sought primarily in the transition societies with a relatively subsistence to cash economy, accompanied by her close relationship chains.
Each subsequent stage of development is not an exact copy of the previous one.Howeve
All of the above suggests that the cyclical nature of economic development - it's only one side of the problem of achieving and maintaining a high level of employment and production, sustainable economic progress of the country.
In the past, did not have enough statistical information when dealing with this issue too much attention paid to crises, panics, bankruptcies.Later, discussing the cyclical nature of economic development, we have isolated two phases: prosperity and depression.Or specifies that the boom and crisis are the top and the point of impact, which is a turning point between these phases.Now it is generally recognized that not every period of improving economic activity entails full employment in manufacturing.For example, after a certain crisis in the United States early 30-ies of the 20th century in the next few years there has been upgrade and fall to a lower level, that is, the period of prosperity can not be considered.Therefore scientist Welsy K. Mitchell, analyzing what is happening, divided cyclical economic development in four phases.The most important are the periods of expansion and contraction.The first phase (expansion), reaching the top, enters a phase of contraction.Likewise compression phase reaches the bottom of recovery and re-enters the expansion phase.That is, all four phases of the series into one another.An important issue for consideration is the modern economists do not increase and periods of recession, namely the dynamics of economic development.Economic cycle, if the calendar year is divided into four seasons.Turning Points shared periods of expansion and contraction.And not each vertex is flourishing in terms of low unemployment.Nor is the lowest point of each crisis.
each phase characterized by their economic circumstances and needs a special approach.The duration of the business cycle depends on which of the cycles taken into account.Some researchers, considering the process from a historical point of view, talking about a very long wavelengths.They cover the full cycle of about fifty years.But not all economists believe it necessary to allocate short cycles (when there was only a weak recession) entering into a great one.