Module XIII·Article III·~1 min read
Economic Cycles
Macroeconomics and Markets
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Economic Cycles
Economic cycles (Business cycle) cycle of the economy (expansion-peak-recession-trough) Expansion / Recovery expansion (everything grows: GDP, employment, income) Peak peak (maximum, then decline) Recession recession (GDP falls two quarters in a row) Trough / Depression trough (cycle minimum, then recovery) Leading indicators leading indicators (show the future: PMI, consumer confidence) Lagging indicators lagging indicators (show the past: unemployment) Coincident indicators coincident indicators (show the present: production) Bull market market rises (optimism, buying) Bear market market falls (pessimism, selling) Market correction drop of 10% from the peak (normal, not a crisis) Market crash sharp drop of 20%+ (crisis) Secular bull/bear market long-term trend (10+ years up or down) Cyclical stocks stocks dependent on the cycle (automobiles, construction) Defensive stocks stocks that decline less during a crisis (food, pharmaceuticals) Counter-cyclical stocks stocks rising in a crisis (life insurance in times of fear)
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