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№ 2019/4
BANDURA Oleksandr Viktorovych 1
1Institute for Economics and Forecasting, NAS of Ukraine
ECONOMIC CYCLE AS A COMBINATION OF STABILITY AND INSTABILITY IN ECONOMIC DEVELOPMENT
| Economy and forecasting 2019; 4:5-21 | https://doi.org/10.15407/econforecast2019.04.005 |
ABSTRACT ▼
It has been empirically proven that the business cycle dating model is
inextricably linked with defining the boundaries of periods of stable and
instable economic development. The author compares the methods of dating
US economic cycles in accordance with the model of the National Bureau of
Economic Research (NBER) and the proposed in this article CMI model of
cycles. Shown certain competitive advantages of dating СМІ cycles based
on the CMI model against the NBER model, in which case there may be
periods of ambiguity in dating.
The article demonstrates that the use of the author\\\\\\\'s СМІ model for dating
business cycles avoids the ambiguities that arise in the official dating of
recessions based on the classic US NBER model of cycles. The dating of US
business cycles with the CMI model revealed a cumulative effect of reducing
unemployment, which explains that even with relatively small economic
growth, which, however, lasts for a sufficiently long period of time, a
significant overall reduction in the unemployment rate can be achieved.
The equation to determine the cumulative market imperfections first index
(?Р) reflects the current balance between inflation, employment and
economic growth for each moment of real (calendar) time and defines
fundamental trends, which can be enhanced (weakened) by random events
(external shocks, government actions, speculators, etc.). Therefore, despite
the single driving force behind economic cycles, which is quantified by
magnitude (?Р), the configuration of each real cycle is unique.
It is shown that the CMI model of economic cycle provides tools to achieve
synergies from different types of regulation to maximize economic growth
and employment at acceptable inflation by increasing the length of the
stability period while reducing the magnitude of cumulative market failure.
Keywords:business cycle, dating, recession, growth rate, stability, instability, unemployment, inflation, regulation
JEL: E30, E31, E32, E37
| Article in English (pp. 5 - 21) | Download | Downloads :302 |
