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Business cycles are recurrent sequences of alternating phases of expansion and contraction in economic activity. The name 'business cycle' has some ambiguity, since it can refer to conceptually different economic fluctuation. Whenever the context does not eliminate ambiguity, the following qualifiers are used to distinguish the different concepts. The 'classical cycle' refers to fluctuations in the level of the economic activity (eg. measured by GDP in volume terms), the 'growth cycle' refers to fluctuations in the economic activity around the long-run potential level, or fluctuations in the output-gap (eg. measured by the de-trended GDP) and finally the 'growth rate cycle' refers to fluctuations of the growth rate of economic activity (eg. GDP growth rate). The OECD CLI is focusing on the 'growth cycle' concept with the amplitude adjusted CLI, but offers translations for the two other concepts with the trend restored CLI for classical cycles and the CLI 12-month rate of change (alternatively year-on-year growth rate) for the growth rate cycle.

A cycle in economic activity is the time span separating two turning points of the same nature (two peaks or two troughs). (OECD Leading Indicator Website, Glossary, 2001).

Source Publication:
OECD Leading Indicator Website, Glossary, 2001.

Cross References:
Business cycles - Other
Growth cycles


Version Indicator: OECD

Statistical Theme: Short-term economic statistics

Created on Tuesday, September 25, 2001

Last updated on Wednesday, April 3, 2013