In the field of economics, an economic cycle is called a fact that occurs in constant fluctuations corresponding to the rates of increase in production, work and other variable aspects in the macroeconomy, at a timerelatively short, for a certain period of time, which very often can last several years. An economic cycle can have several aspects that can be constant, however its magnitude and duration can vary. More explicitly, it can be said that business cycles are transitions that present aggregate supply and demand, which are represented in ups and downs, which can occur repeatedly from time to time over the years.
An economic cycle can have different phases which are described below:
- Depression: these are time lapses in the economy where the production processes are stopped almost entirely, this phase represents a real fall in the economy, during this period the necessary factors will be originated that will give way to the next phase of the cycle. It should be noted that these phases will not depend on the will of the people since they are the result of the capitalism movements.
- Recovery: during this phase of the cycle, the reactivation of all economic processes in general takes place, as a consequence of this there is a significant increase in employment rates, in production processes, sales and investments. Variations in the economy have a displacement that increases little by little, which will be seen in all areas of the economy.
- Boom: it is during this stage that the different economic activities are in a state of wealth and full apogee, this phase is totally opposite to the depression, where there is only underdevelopment and economic backwardness, this period may have a duration variable, this will depend on the different conditions of the economy. Finally, when production is paralyzed again, the crisis is present, giving way to a new cycle.
- Recession: it occurs when economic activity takes a step back in general terms, in this phase the contradictions of capitalism are present, a clear example is the excess of production with respect to the demand in some areas and the lack of production in others.
