What is the business cycle dating committee
Some economists believe that the business cycle is a natural part of the economy.
But there are others who believe that central banks indirectly control the cycle by intervening with monetary policy.
The reference dates of the United States' business cycles are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), which looks at various coincident indicators such as real GDP, real personal income, employment, and sales to make informative judgments on when to set the historical dates of the peaks and troughs of past business cycles.
The NBER was founded in 1920, and the first business cycle dates published in 1929.
Critics believe that if central bankers stop intervening, it would all but rid the economy of these cycles.
For example, an investor may choose to invest in commodities and technology stocks at the end of the business cycle because they may be cheap, and then sell them during the early part of an expansion.
Business cycles are generally measured using the rise and fall in the real gross domestic product (GDP) or the GDP adjusted for inflation.
Many people start to restructure as the economy's growth starts to reverse.
Economic growth continues to drop while unemployment rises and production plummets.
The business cycle describes the rise and fall in production output of goods and services in an economy.