An Analysis on Theories of Business Cycle

Authors : Trisha.S; Angel Samson

Volume/Issue : Volume 7 - 2022, Issue 12 - December

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Due to the enormous increase in company production in modern times, industries need more laborers, which drives up production costs, frees up more cash so that companies can invest in growth. Similar to this, if corporate production slows down, so does employment and investment in expansion. This emphasizes the idea of a business cycle, which is the longterm downward and upward oscillations in the economy's productivity level and natural growth rate. Due to rising globalization, business cycles across nations synchronize more frequently than they did in the past. Individuals may form life opinions, investors can form financial opinions, and governments can form useful policy ideas by understanding the many economic cycle phases. A business cycle's duration is the time frame that includes one expansion followed by one compression. The four phases of a full business cycle are expansion, peak, compression, and trough. With the use of a successful model called the "Sunspot model," the phases and causes of the business cycle are explained for further analysis.

Keywords : Business Production, Growth Rate, Globalization, Economic Cycle and Sunspot Model


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30 - April - 2024

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