Business Cycles: empirical facts Flashcards
what are business cycles
a series of alternating booms each leading up to a peak and recessions each up to a trough
what does a cycle consist of
a series of recurring booms and bursts of surrounding a country’s long-run growth path
in practice what are business cycles all about
all about recessions
simple algorithm
two consecutive quarters of decline in a country’s real GDP
actual/holistic
-duration
-depth
-diffusion
a significant decline in economic activity that is spread across the economy and lasts more than a few months
-lasts at least 6 months
-economically significant
-diffused to many sectors in the economy
procyclical
correlates positively with real GDP
countercyclical
correlates negatively with real GDP
acyclical
exhibits correlation with real GDP
leading
timing of cycle precedes real GDP
lagging
timing of cycle follows real GDP
coincadent
timing of cycle mirrors real GDP
example of finanical crises
great recession
example of monetary crises
1980s with high inflation
public health crises exmaple
covid
what happened in great depression but not great recession
lack of monetary support, in great depression they experienced raised rates
causes of great depression
financial and monetary
what type of inflation occurred during volcker disinflation
stagflation
cause of volcker disinflation
monetary
cause of great recession
financial
what are the three recession types
supply
-demand
-supply and demand
supply recession
unable to procure the necessary means of production
demand recession
they do not forsee to be able to profitably sell their product
