The business cycle is a depiction of the cyclical nature of a nation’s economy. The business cycle is characterized by a regular wavelike series of peaks and troughs. Understanding the causes of the upturns and downturns in the business cycle helps to forecast economic growth and decline as well as asset pricing.
The business cycle defines changes in aggregate economic activity but the effect of the business cycle is different for every industry.
Related Terms: Economic Indicators – Stock Market Indicators – Stock Market Timing – Buy and Hold