The economic fluctuation is a set of successive and constant changes in prices or economic ratios. This, over a certain period of time and for reasons of various economic, political or social types. 

A fluctuation in an economic ratio develops when its measurement results in a permanent evolution, both upward and downward and demonstrating a certain degree of instability. To a large extent these changes respond to various external causes or to the action of supply and demand in most markets.

Often the existence of economic fluctuations entails losses and gains for the participants in the map of the economy. This, due to changes in the value or price of goods, services, merchandise or financial values.

That said, it should be noted that the level of fluctuations in a given economy or sector will depend directly on the volatility that exists in it or in the object of study observed.

Different economic applications of fluctuation

In the field of statistics, the term fluctuation is especially related to the study of finance and the development of economic theories.

In that sense, it is usual nowadays to talk about fluctuations or deviations in oil prices, in the value of the stock of a company on the stock market or in the unemployment levels of a particular country.

Types of fluctuation

In response to the pattern to which they respond over time, two categories are distinguished:

  • Cyclic fluctuation:It corresponds to different periods of growth or decrease that are happening over time following a kind of pattern.
  • Irregular fluctuation: It doesnot respond to foreseeable changes and is a consequence of different external effects.

In economics there are a large number of positions or theories that use the existence of fluctuations as the basis of study. In that sense, they can be found in important postulates such as the random walk theory or the theory of efficient markets .

Leave a Comment