Business cycle dating
These two words mean a lot in daily broadsheets because the effects can be tremendous enough to shake the entire stock market and bring people out of job.
The trough stage takes place when the economy is turning a corner, with the growth rate still being negative, just not as bad as before. The expansion stage refers to that period of positive GDP growth after the economic contraction. In this part of the business cycle, a healthy GDP growth rate should be in the range of 2 to 3 percent.
The National Bureau of Economic Research (NBER) is the official entity which determines the business cycle phases.
The unit tasked to do this is the Business Cycle Dating Committee which utilizes quarterly GDP growth data as the main indicator of fluctuations.
I also benefited from comments by Klaus-Jürgen Gern and the participants of a workshop in Dresden and a seminar in Würzburg.
The business cycle affects everyone, from the busy banker to a simple utility worker.
A business cycle is the term for the recurring fluctuations in economic activity.