ECON 104 Lecture 8: Chapter 8
14 Aug 2015
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Document Summary
We are concentrating on the short run fluctuations in this topic rather than on the sources of the long run economic growth. The economies generally go through fluctuations in economic activity. Consider the gdp per capita illustrated in figure 1 on the next page. Around 2008, the gdp per capita in every economy has turned down. Notice that some have recovered later on (like canada) and some haven t (like greece). This canadian experience between 2008 and 2012 illustrates the business cycle, the fluctuations in economic activity that an economy experiences over a period of time. A business cycle is basically defined in terms of periods of expansion or recession. During expansions, the economy is growing in real terms (i. e. excluding inflation), as evidenced by increases in indicators like employment, industrial production, sales and personal incomes. During recessions, the economy is contracting, as measured by decreases in the above indicators.
