During expansions, the economy, measured by indicators like jobs, production, and sales, is growing--in real terms, after excluding the effects of inflation.
A monthly indicator that moves with the economy The National Bureau of Economic Research (NBER) has designated nine business cycles over the years from 1945 to 1991.
During this period, the average business cycle lasted about five years; the average expansion had a duration of a little over four years, while the average recession lasted just under one year.
This is important in a country like India where GDP numbers are contentious and political parties try to score points on these numbers.
Also, the BCDCs are created by independent non-profit organizations.
Between trough and peak, the economy is in an expansion.
Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.How does the NBER determine business cycle turning points?The NBER a private nonprofit nonpartisan research organization, determines the official dates for business cycles.The NBER's researchers have selected turning points for over 30 business cycles, beginning in the mid-1800s.Data on these official business cycle turning points and dates are available from the NBER website at How do NBER recessions differ from the common description of a recession as, "a period when real gross domestic product declines for two consecutive quarters?" The NBER's seven-member Business Cycle Dating Committee examines monthly economic indicators that provide a good industry-wide economic perspective to date business cycles.The chart shows the periods of expansion and recession for the Composite Coincident Indicator Index from 1959 to 2002.This index, published by The Conference Board ( moves very closely in line with current economic conditions.Timely identification of economic contraction and its severity allows policymakers to intervene, and thereby reduce its amplitude and duration.In addition, firms can re-evaluate projections of sales and profits, and the consumers their purchasing and investment plans, based on information on transitions to new business cycle phases. Whether a BCDC should be part of the government, the RBI or an independent research organization with high credibility is debatable.