The business cycle refers to the fluctuations in economic activity that an economy experiences over a period of time. It consists of expansion, peak, recession, trough, and recovery phases.
In the context of finance and economics, contraction can refer to various scenarios including the distribution of assets and economic downturns. It is important to distinguish these different contexts to understand the implications fully.
A period during which lenders are unwilling to extend credit to borrowers. The term is particularly associated with the period beginning in late 2007, when the previous era of 'easy credit' came to a sudden end in the wake of the subprime lending fiasco.
Cyclical unemployment refers to the unemployment caused by a downturn in the business cycle. It typically rises during economic recessions and falls when the economy improves.
A downturn refers to the shift of an economic or stock market cycle from rising to falling, indicating a move from expansion to recession or from a bull market to a bear market.
A downturn in economic activity, defined by many economists as at least two consecutive quarters of decline in a country's Gross Domestic Product (GDP).
A slump denotes a noticeable drop in economic or productive activity. While it indicates a downturn, it is generally less severe than a recession or a depression.
A soft landing refers to a situation in which an economy slows down but manages to avoid falling into a recession. This term was borrowed from astronautics in the late 1950s and originally described a safe moon landing.
In economic terms, a trough signifies the lowest point in a business cycle, marking the end of a declining phase and the start of an expansion or recovery.
A financial term often used to describe a low point in economic activity, as seen in a 'trough' in the business cycle.
