The economic cycle

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economic cycle - is one of the key concepts of the history of the development of economic relations.Social production is characterized by the regular fluctuations that are repeated at regular intervals.

the first time to such economic fluctuations attracted the attention of Helen Clark - English economist, who said that the gaps between the economic crisis is not accidental.In developing his ideas a huge contribution made by the Russian explorer - NDKondratiev.

theory of the economic cycle is based on the change of the four series of upcoming phases of the crisis - depression - revival - peak.

crisis is the imbalance in the economic system, which leads to a decrease in production and its stop.When market relations is expressed in the crisis of overproduction, which resulted in a sharp fall in prices.An example of this phase can serve krizis1929-1933 years, when prices in the US fell more than 50%.Declining output, rising unemployment, falling incomes and, consequently, the effective demand for goods.

Depression is a period during which the goods surplus gradually diverge at reduced prices or even deteriorate.Sales gradually recovering and the fall in prices will stop.Starting a slight increase in the volume of production, but the trade is still going fast enough.Capital is concentrated in banks, finding applications in production and trade.This leads to an increase in the money supply and lower interest rate of the loan.The economic cycle enters a stage of recovery.

Revival is characterized by reduction of the pre-crisis production volumes, higher prices and profits of enterprises, employees' salaries.Gradually, the level of production and employment in the pre-crisis level of return, reach their peak.

Peak - a full load of production, the maximum possible employment, a high level of prices, wages and interest.

economic cycle - the concept is quite broad.Provided its many species.Most often used in the theory of four.

Kitchin cycle of short-term (3-4 years) - is associated with fluctuations in gold reserves in the world and the laws of monetary circulation.The medium-term cycle (10-20 years) Zhuglara (industrial) - is associated with the processes of credit sphere that affect the investment processes;Kuznets (construction) - with periodic updates of various structures of production.Long-term (45-60 years) Kondratieff cycle - associated with innovation.

Economists have different definitions of the causes of the change cycles.There are three approaches to the explanation of this phenomenon.

The first is based on the fact that the economic cycle is due to factors unrelated to the economic system itself.Mainly influenced by fluctuations in the production of natural phenomena and political events.The second considers the cycle as an internal phenomenon of the economy.The main factor influencing the shift of the economy, such an approach is considered to be cyclical updates involved in the production of fixed capital.In the ups and downs affect the depletion of the investment, the change in the money supply, lowering the multiplier effect, updating of capital, etc.The third approach sees the reason for fluctuations in the interaction of internal economic factors with the environment.The latter are considered as primary, that trigger the onset of action of internal factors.The main external factor is the state.

Thus, the economic cycle is a special type of fluctuations in economic activity.Change leads to cycles of compression and expansion of production, business, employment and other indicators.Cycles vary in intensity, duration, and other characteristics, but all of them characterized by the same phase.