Business Cycle Characteristics.The Business Cycle allows us to know the various changes that occur in economic activities.Economic cycles do not have a fixed duration. However, statistical studies have distinguished business cycles of different sizes, classifying them as follows.
10 Business Cycle Characteristics In Economy.
I Synchronism:
The depression and boom follow each other. The depression in one industry also affects other industries. Therefore, all industries are affected.
/ International in Character:
The world is knit in one economic unit through international trade. 111us if there is prosperity or crisis in one part of the world, it is shared by nil other countries of the world too.
‘ Difference in Degrees:
Sometimes capital goods industry are affected and sometime t onsumer goods industry are affected because there is a difference of degrees.
I Continuous:
The phases of trade cycle follow each other and it is completed between 8 to 18 years.
- Process of Trade Cycle:
When recovery starts from depression, the process is generally slow but when recession begins, it is usually fast.
<». Self Generating:
The business cycle is said to be self-generating phenomenon. Each phase contains in it self the forces, which bring an end to it and generate 11 ic next phase.
- All Pervading:
Cycles are all pervading and generally spread through out the economy of a country. They affect each and every economic sector and aspect of a country. In fact, their effects reach even social and other matters of a community.
- Financial Crisis:
The financial or monetary crisis is connected with trade cycle. By far the most severe financial crisis in the entire period was that which began in the USA on October 29, 1929.
old of prosperity.
Critical Analysis:
- The economic causes of fluctuations in economic activities are totally ignored.
- The cosmological circumstances I atmosphere are the causes of trade cycle. Cosmological effects to some extents may affect the agro-based industries but the other industrial changes do not have ”ry concern with cosmological effects. So this concept is incapable to explain the trade cycle properly.
