Markedscyklusser

Markedscyklusser, or market cycles, describe fluctuations in overall economic activity over time. They reflect changes in demand, production, and confidence, producing alternating periods of growth and slowdown in measures such as GDP, employment, and inflation. A typical cycle comprises four phases: expansion, peak, contraction, and trough.

Expansion is a period of rising output, falling unemployment, and rising investment and consumption. The peak marks the highest level of activity before a slowdown begins. Contraction (or recession) involves falling output and rising unemployment, while the trough is the low point after which activity begins to recover.

Causes and drivers: Cycles arise from interactions among households, firms, financial markets, and policymakers. Demand shocks, credit conditions, technological changes, commodity prices, and policy responses can amplify or dampen fluctuations. Real business cycle theories emphasize supply-side or technology shocks, while Keynesian approaches focus on demand management.

Measurement and indicators: Economists use leading indicators (stock prices, new orders, consumer expectations) to anticipate cycles; coincident indicators (GDP, employment, industrial production) to assess current activity; and lagging indicators (unemployment rate, inflation) to confirm phases after they occur. Cycles vary in length and amplitude and are not strictly periodic.

Policy and implications: Cycles affect investment timing, employment, wages, and inflation. Central banks and governments deploy monetary and fiscal tools—such as interest rate adjustments, stimulus, and automatic stabilizers—to mitigate recessionary downturns and to moderate overheating during expansions. The study of cycles informs long-run growth analysis and financial planning.

In Danish literature, the term is markedscyklusser; in English discussions these phenomena are typically called business cycles or economic cycles.