Economic situation one calls the total situation of a national economy. It is derived from the simultaneous view of different economical sizes. The most important indicator is the GROS DOMESTIC PRODUCT (gross domestic product).

It is characterized thereby by economic cycles, fluctuations of several years of the economic activity in according to the free market organized national economies. These cycles concern the economy as a whole and exhibit a regularity. Economic cycles consist as a rule of upward pulse phases (expansion), the boom (boom), wing over phases (recession) and the depression. While the economic growth is to due mainly to offer effects, fluctuations relating to market conditions are always demand conditioned.

Such fluctuations are already for a long time observed, were however often consequence of singular events like e.g. speculation crises. A certain regularity of these fluctuations leaves itself at least to in 19. Century inside occupy. This regularity is it, in the long run the scientific argument with the phenomenon "“economic situation"” justified.

Length of the cycles

Independently several market researchers identified fluctuations of different length. Kitchin for example found cycles with a length of 2-4 years, Spiethoff such with one duration of 7-11 years. Cycles in addition were found with one duration of approximately 40 - 60 years, which Schumpeter is enough for waves as '' '' or Kondratjew cycles designated.

The length, which one attributes to an economic cycle, depends substantially on it whether one the level of the economic activity (usually based on overall economic production, thus the gross domestic product) as yardstick consults, or the growth rates. If one defines beginning and end of an economic cycle thereafter whether the restaurant achievement was absolutely declining (, classical Konjunkturzyklen"´"´), then one finds longer cycles. An organization on the basis growth rates leads to a larger number of shorter, Wachstumszyklen"´"´. Alternatively one can measure economic situations also to how strongly the production capacities of the enterprises are working at full capacity. Here fluctuations between approximately 70 per cent (recession) and 100 per cent (boom) are conceivable. Accordingly the economical definition of the economic situation reads according to usual Lehrmeinung: Fluctuations in the rate of utilization of the production potential of a national economy. Here both a macro cycle is described from several years to decades duration and contained Microzyklen of few years, not however under-year old season cycles.

Phases of the cycle

Economic cycles are divided by different researchers and institutions into several phases. A two-phase pattern is common, with which one divides the economic cycle into an upswing and a wing over. The upward pulse phases take usually the by far largest part of the cycle, while wing over phases are generally quite short. This pattern is in particular in the USA very common. After an organization the upswings took on the average 52 months, the after the Second World War however only 10 months.

Expansive phase (upswing)

The phase of the economic upswing is coined/shaped by concerning rising order books and productions, sinking the unemployment ratios, a tendentious perceptible however still small price increase, low interest with rising tendency as well as optimistic prognoses the economic development.

Boom

In the phase of the boom (upper turning point phase, boom) the capacities of an economy are working at full capacity due to strong demand. It prevails to full employment, partially even lack of worker. The wage level rises, however also the prices and the interest continue to tighten. Production is increased until an overheating of the market occurs - if thus rising interest due to increased credit demand and increased bad investments prepare due to excessively optimistic expectations ever more enterprises of problems. One speaks also of saturation of the market. Characteristics of a satisfied market:

• Size of the market rises only to small extent
• Partial markets are seized by stagnation or contraction
• Price purge
• less productive and many small enterprises separate from the market
• Enterprise assumptions strengthen concentration and consolidation processes
• polypolistische market structures are replaced by oligopolyistic structures

From now on the gross domestic product does not continue to increase, a turn occurred. The phase of the wing over was introduced.

Recession

The recession (wing over, kontraktive phase) designates the Konjunkturphase, in which a stagnation arises up to the wing over of the economy. To most common definition it means that a recession is present, if the economy does not grow two quarter successively, and/or a decrease is to be registered (sinking gross domestic product), however compared to the respective quarter of the previous year (not in the comparison to the quarter directly before the regarded!). A recession entails usually Kursverluste at the stock exchange. If a recession is intensified and/or if it comes to a longer kontraktiven phase, one speaks of depression.

Recession

A recession is the lowest point after the wing over of a national economy. It is strengthened by structure crises, in which during a longer period gainful occupation (like it for instance the gross domestic product indicates) decreases/goes back, the stock exchange courses falls, which rise unemployment strongly and deflation arises, i.e. the price level sinks, goods becomes cheaper.

The likewise frequently used designation depression (lat of. "“deprimere"” = low pressure) means a recession, but a negative growth rate, thus a sinking, in the actual sense not absolute gross inland product. Frequently the term depression is brought with the world economic crisis at the end of the 1920er years in connection, where it was called for the first time. This depression was coined/shaped by a mass unemployment of unknown extent. High point of the world economic crisis was the collapse of the stock exchanges on so-called black Friday.

For the proponents of psychological reasons for economic crises according to the principal reason for a depression is appropriate in a confidence collapse of the population into the economic system. Fear of job loss leads them according to to decreased expenditures, which lead again to increased dismissals. Others make politico-economic wrong decisions responsible to reduce (in the case of the world economic crisis e.g. excessive protectionism and measures lacking by influences of Kursverlusten on important markets) or other factors - exogenous influences, herd impulse with investments, etc.

Articles in category "Economic situation"

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