Definition of business cycle

Also known as the economic cycle. The period of time during which an economy moves from a state of expansion to a state of contraction, before expanding again. A cycle can last anywhere between 2-1/2 and 50 years depending on which economic theory one adheres to. In practice, a cycle should contain a phase of expansion or recovery (to a peak) and a phase of slowdown or recession (to a trough). If the rates of growth and contraction are very strong, an economy could be ""booming"" for a while at its peak, while the trough could see a phase of depression or stagnation. A trend governed by a business or economic cycle is termed cyclical.