understanding business cycles. digital safari institute greenbizz project stages of a business cycle...
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Digital Safari Institute GreenBizz Project Business Cycle: ExpansionTRANSCRIPT
UnderstandingUnderstandingBusiness CyclesBusiness Cycles
Digital Safari InstituteGreenBizz Project
Stages of a Business CycleStages of a Business Cycle
Expansion PhaseExpansion Phase– BoomBoom– PeakPeak
Contraction PhaseContraction Phase– SlowdownSlowdown– Recession (2+ quarters)Recession (2+ quarters)– TroughTrough
Digital Safari InstituteGreenBizz Project
Business Cycle: ExpansionBusiness Cycle: Expansion
Digital Safari InstituteGreenBizz Project
Business Cycle: PeakBusiness Cycle: Peak
Digital Safari InstituteGreenBizz Project
Business Cycle: ContractionBusiness Cycle: Contraction
Digital Safari InstituteGreenBizz Project
Business Cycle: RecessionBusiness Cycle: Recession
Digital Safari InstituteGreenBizz Project
Business Cycle: TroughBusiness Cycle: Trough
Digital Safari InstituteGreenBizz Project
Business Cycle: RecoveryBusiness Cycle: Recovery
Digital Safari InstituteGreenBizz Project
Business Cycle: ExpansionBusiness Cycle: Expansion
Digital Safari InstituteGreenBizz Project
U.S. Economy: 1970-2006U.S. Economy: 1970-2006Cycles of Booms, Busts and RecessionsCycles of Booms, Busts and Recessions
Source: Bureau of Economic Analysis
ExpansionContraction
Digital Safari InstituteGreenBizz Project
U.S. Economic RecessionsU.S. Economic RecessionsHow Long and How Severe?How Long and How Severe?
Historical Period Historical Period MonthsMonths Feb ‘45 - Oct ’45 8Nov ‘48 - Oct ’49 11Jul ‘53 - May ’54 10Aug ‘57 - Apr ’58 8Apr ‘60 - Feb ’61 10Dec ‘69 - Nov ’70 11
Peak
Trough
Historical PeriodHistorical Period MonthsMonths Nov ‘73 - Mar ’75 16Jan ‘80 - Jul ’80 6Jul ‘81 - Nov ’82 16Jul ‘90 - Mar ’91 8Mar ‘01 - Nov ’01 8
Average Duration: 10 Months
Average Severity: -1.8% (Real GDP)
Tracking theTracking theBusiness CycleBusiness Cycle
Digital Safari InstituteGreenBizz Project
Useful Economic IndicatorsUseful Economic Indicators
Gross Domestic ProductGross Domestic Product (GDP)(GDP)
Interest Rates Interest Rates (Federal Funds Rate)(Federal Funds Rate)
Inflation Inflation (Consumer Price Index or CPI)(Consumer Price Index or CPI)Employment Employment (Number of New Jobs)(Number of New Jobs)Unemployment Unemployment (%)(%) Income Growth Income Growth (% Change)(% Change)Corporate After Tax Profits Corporate After Tax Profits (% Change)(% Change)
Digital Safari InstituteGreenBizz Project
Tracking the Business CycleTracking the Business Cycle
ExpansionExpansion ContractionContraction Interest Rates:Interest Rates: UpUp Down Down Inflation:Inflation: UpUp Down Down Employment:Employment: UpUp Down Down Unemployment:Unemployment: DownDown Up Up Income:Income: UpUp Down Down Corp. Profits:Corp. Profits: UpUp Down Down
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