morphology of cycles

Economic cycles, also known as business cycles, are the recurring patterns of expansion and contraction in economic activity. These cycles typically consist of four phases: expansion, peak, contraction, and recovery.1

• Expansion: Characterized by rising production, employment, incomes, and consumer spending. Businesses increase production and hire more workers.12
• Peak: The economy reaches its maximum growth rate. Demand may outpace supply, leading to rising prices and production costs.1
• Contraction: A period of economic slowdown where production, spending, and stock values decline. This can lead to recession or depression.1
• Recovery: The economy hits its lowest point and begins to grow again, with policies enacted during contraction starting to show positive effects.1

The duration of these cycles varies, making precise timing difficult. Economic indicators, such as housing starts or unemployment rates, are used to gauge the economy's position within these cycles.13