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Business Cycles
So far……… ,[object Object],[object Object]
Dynamics of Income Movements ,[object Object],[object Object],[object Object],[object Object]
Business Cycles ,[object Object],[object Object]
[object Object],[object Object]
[object Object],[object Object]
Generalising… ,[object Object]
Phases of Business Cycle
A Typical Business Cycle Number of Years   Level of Business Activity P M depression boom recession prosperity recovery X Y O
Depression ,[object Object],[object Object],[object Object],[object Object]
Recovery  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Prosperity  ,[object Object],[object Object],[object Object],[object Object],[object Object]
Boom  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Recession ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Classification of Business Cycles Prof. James Estey
Major & Minor Cycles ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Building Cycles   ,[object Object],[object Object],[object Object],[object Object]
Kondratieff Cycles or Long Waves  ,[object Object],[object Object],[object Object]
Theories of Business Cycle
Sunspot theory ,[object Object],[object Object],[object Object],[object Object]
Psychological theory ,[object Object],[object Object],[object Object]
Overproduction theory  ,[object Object],[object Object],[object Object]
Over-saving theory ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Innovation theory ,[object Object],[object Object],[object Object],[object Object]
Monetary theory  ,[object Object],[object Object]
Theories of Business Cycles ,[object Object]
Multiplier ,[object Object],[object Object],[object Object],[object Object]
Accelerator ,[object Object],[object Object],[object Object],[object Object]
Acceleration principle  ,[object Object],[object Object],[object Object]
Two relationships… ,[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object]
Generation of Business Cycle ,[object Object],[object Object],[object Object]
Example: ,[object Object],[object Object],[object Object]
Multiplier Period Initial Outlay Induced Consumption Induced Net Investment Total increase in NY 1 Rs.10 0 0 Rs. 10 2 Rs.10 Rs.  5 Rs. 10 Rs. 25 3 Rs.10 Rs. 12.5 Rs. 15 Rs. 37.5 4 Rs.10 Rs. 18.75 Rs. 12.5 Rs. 41.25 5 Rs.10 Rs. 20.62 Rs. 3.74 Rs. 34.36 6 Rs.10 Rs. 17.18 Rs. – 6.88 Rs.20.3 7 Rs.10 Rs. 10.15 Rs. – 14.06 Rs. 6.09 8 Rs.10 Rs.  3.05 Rs. –14.20 Rs. –1.15 9 Rs.10 Rs. - 0.58 Rs. – 7.27 Rs. 2.15 10 Rs.10 Rs. 1.07 Rs. 3.32 Rs. 14.39 11 Rs.10 Rs. 7.20 Rs. 12.25 Rs. 29.44
 
Methods to Control Business Cycles
Monetary Policy  ,[object Object],[object Object],[object Object]
Fiscal Policy ,[object Object],[object Object],[object Object]
Automatic Stabilizers ,[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object]

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8 business cycles

  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 9. A Typical Business Cycle Number of Years Level of Business Activity P M depression boom recession prosperity recovery X Y O
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15. Classification of Business Cycles Prof. James Estey
  • 16.
  • 17.
  • 18.
  • 20.
  • 21.
  • 22.
  • 23.
  • 24.
  • 25.
  • 26.
  • 27.
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33.
  • 34. Multiplier Period Initial Outlay Induced Consumption Induced Net Investment Total increase in NY 1 Rs.10 0 0 Rs. 10 2 Rs.10 Rs. 5 Rs. 10 Rs. 25 3 Rs.10 Rs. 12.5 Rs. 15 Rs. 37.5 4 Rs.10 Rs. 18.75 Rs. 12.5 Rs. 41.25 5 Rs.10 Rs. 20.62 Rs. 3.74 Rs. 34.36 6 Rs.10 Rs. 17.18 Rs. – 6.88 Rs.20.3 7 Rs.10 Rs. 10.15 Rs. – 14.06 Rs. 6.09 8 Rs.10 Rs. 3.05 Rs. –14.20 Rs. –1.15 9 Rs.10 Rs. - 0.58 Rs. – 7.27 Rs. 2.15 10 Rs.10 Rs. 1.07 Rs. 3.32 Rs. 14.39 11 Rs.10 Rs. 7.20 Rs. 12.25 Rs. 29.44
  • 35.  
  • 36. Methods to Control Business Cycles
  • 37.
  • 38.
  • 39.
  • 40.