Properties of Trade Cycle
by Fluctuations is aggregate economic activity represent trade cycles. If there are downswing and upswing trends in a particular sector of the economy, they will not represent trade cycles. For example, if there is brisk in textile while other sectors are operating as usual, this will not be the case of trade cycle.
Aggregate Economic Activity
Fluctuations is aggregate economic activity represent trade cycles. If there are downswing and upswing trends in a particular sector of the economy, they will not represent trade cycles. For example, if there is brisk in textile while other sectors are operating as usual, this will not be the case of trade cycle.
The Periods of Phases
The periods of phases with respect to their duration and intensity are not alike. All phases of trade cycle do not regenerate in a similar pattern. In some cycles, the period of depression is acute and prolonged as compared with the period of prosperity. While in some cycles, the economy rapidly turns from depression to revival while in others it may be of slower nature. A trade cycle, as known as Juggler cycle attributed to the name of Clament Juggler, completes its all phases in the period of 9 or 10 years. While, according to Kandretiff, a cycle lasts for 50 years.
The Nature of Diffusion of Effects
The effects of trade cycle do not remain confine to a particular segment of the economy, rather they are spread over to all the sectors of the economy. The economic expansion in textile will have its effect on allied businesses, then on agriculture, mining, transportation and construction, etc. Moreover, the changes in phases of trade cycle do have the effects on wages, prices, rents, profits, consumption, savings and investment.
International in Nature
Trade cycles are international in nature. It means that the prosperity in one country will have the effect on the economies having commercial ties with the country concerned. In other words, the trade cycles are transmitted to the other countries. As it happened during 1930’s Great Depression when unemployment spread over to all the capitalist economies.
Social Effects
The trade cycles generate, in addition to economic, the social effects. As during depression, suicides increase because of economic stringencies while in prosperity the birth rate rises because of economic easiness.
Liked it
