The cyclical nature of economic development is its objective characteristic, which is recognized by all modern economists. They believe that a market system simply cannot exist without experiencing ups and downs at certain points in time. The cyclical development of the economy is something that everyone has to reckon with, because it has a direct or indirect effect on all subjects: both individual households and the state as a whole. But what is the reason for the appearance of unexpected recessions and how to take it off to fight?
The cyclical development of a market economy is what representatives of the Soviet school often talked about, advocating an administrative-command way of managing the entire system. They stated that only centralized regulation could mitigate the effects of recessions and crises. Perhaps this is true. But whether the
team economy is experiencing a real recovery is a big question.
Most modern scientists agree that the cyclical development of the economy and the change in the phases of business activity is an
objective reality that people can’t change. Just as one cannot learn anything without making mistakes, the economy cannot go to a new stage of development without surviving the crisis. The cyclical development of the economy reflects a situation in which the system goes out of balance in order to appear updated when it is restored. Crisis is the lower extremum of this growth cycle. There are several types:
1) K. Zhuglara (7-11 years) - associated with fluctuations in investment in fixed assets;
2) J. Kitchin (2-4 years) - the reason for which lies in changes in world gold reserves;
3) N. Kondratyev (50-60 years) - associated with scientific and technological progress and its achievements.
In addition to the crisis, there are three more phases that characterize the cyclical development of the economy: depression, recovery and recovery. They differ in such volume indicators as GDP (gross domestic product), GNP (gross national product) and NI (national income). The whole cycle breaks up into the following elements:
1) peak (the point at which the output was maximum);
2) reduction (the period in which a gradual decrease in output occurs);
3) the bottom (the point that indicates the moment at which the release is minimal);
4) rise (the period in which production is gradually adjusted).
The cyclical development of the economy can also be imagined by considering the alternation of the ascending and descending waves, which has a huge impact on the entire economy and the country as a whole, as well as on individual economic entities. But it turns out that crises are also possible in a period characterized by a general recovery or recovery in the economy. These are the so-called intermediate crises, which are most often local in nature. They do not cover the entire economy as a whole, but individual sectors or areas of economic activity. Structural and transformational crises are characterized by more serious consequences, which are much longer and affect the functioning of each individual subject.