The Business Cycle

The four phases of the economic cycle, why the stock market usually turns before the economy, and how the yield curve fits in.

Economies move in cycles

Economies do not grow in a straight line. They go through repeating periods of expansion, when output, jobs and profits rise, and contraction, when they fall. This pattern is called the business cycle. No two cycles are the same length or shape, but the phases are similar enough that investors find the framework useful.

Unlock all of Investing School

The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.