Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.


Term of the day

inventory cycle

Also termed stock cycle, an inventory cycle is the fluctuation of GDP caused by the accumulation and the selling of stocks/inventories. If production is greater than demand, GDP will rise but companies will also accumulate unsold stocks. This will encourage some to scale back production, cutting GDP even if demand remains constant. An economic cycle is created and normally the inventory cycle amplifies the existing economic cycle as stocks are accumulated in good times and production is reduced...