Story: Business cycles

Business cycle

Economies and businesses have periods when their activity is growing and periods when it is contracting. Economists measure the extent of a cycle in two ways. Firstly, during the expansion phase they measure the extent or amplitude of increased activity, from the trough of a downturn to the peak of the upturn. During the contraction phase they measure the difference between the peak and the subsequent trough. Secondly, they examine the duration of these expansions or contractions. This stylised graph shows how the duration and amplitude are measured.

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How to cite this page:

Viv B. Hall, 'Business cycles - What is a business cycle?', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/interactive/24157/business-cycle (accessed 24 May 2024)

Story by Viv B. Hall, published 11 Mar 2010