BUSINESS CYCLE

Business Cycle



ACKNOWLEDGEMENT

I would like to take this chance for thanking my research facilitator, friends and family for the support they provided me and their belief in me as well as guidance they provided without which I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, and this dissertation has not been submitted for any examination at academic or professional level, previously. It is also representing my very own views and not essentially those that are associated with the university.

Signed __________________ Date _________________

TABLE OF CONTENTS

ACKNOWLEDGEMENTii

DECLARATIONiii

CHAPTER 1: INTRODUCTION1

CHAPTER 2: LITERATURE REVIEW2

General Features of the Economic Cycle3

Recurrence3

Time4

Breadth or depth (Also called extent)4

From Recovery to Expansion4

From Top to Contraction4

Theories of the Business Cycle5

CHAPTER 3: CRITICAL ANALYSIS6

CHAPTER 4: CONCLUSION8

Recession8

The recovery8

The expansion9

Theories of disproportion9

The Philip Curve10

REFERENCES11

CHAPTER 1: INTRODUCTION

Business Cycle is a very important concept for the economy. If we assume that the economy will develop in two ways, either positive or negative, the business cycle is the trend. If the economic situation is the combination of different elements that gives rise to a unique evolution of the economic system, then economic analysis is the study of how and why these elements are combined; If we accept that the economy will evolve in two ways, (for simplicity we can term it positive or negative here), then the study of the economic situation is the study of fluctuations between these two modes of the economic system that take place over a period of time.

The cyclical or short-term fluctuation is defined as a sequence, where there are times of prosperity or expansion of alternate periods of stagnation or recession. The succession of fluctuations or fluctuations in the economic system is thus the economic cycle, which is characterized by the return, but not the frequency. It is in the sense that you know the maximum and minimum will be repeated but no one knows when. The business cycle comprises of expansions taking place almost at the same time in numerous economical actions, succeeded by recessions and contractions, and shots that feed into the phase of expansion of the following cycle. (Bowles & Edwards 2005, 78-82)

This paper will talk about business cycle, its theories, and will critically analyze and talk about each type of business cycle. Moreover, business cycle would be talked about in the context of recession and recovery from depression. Furthermore, business cycle theories by Karl Marx and John Maynard Keynes would also be discussed in order to make the process clearer. (Evans 2004, 47-100)

CHAPTER 2: LITERATURE REVIEW

The literature attempts to explore the idea of business cycle. Various studies show that a business cycle takes place because of the fluctuations which keeps occurring in economies all over the world. These fluctuations take place due to the changes taking place in the growth of economy in a country. The understanding of the business cycle is necessary because it serves as a basic idea for understanding the discipline of ...