Economic cycle is predictable long-term pattern changes in national income. What has been seen is that traditionally business cycles have four stages in its lifecycle: expansion, prosperity, contraction, and recession. After a recessionary phase, the expansionary phase can start again or the economy can stay in dormant mode for a longer period of time. The phases of the business cycle are characterized by changing employment, industrial productivity, and interest rates, which earlier used to be a national phenomenon, but now with the globalization, economic cycle internationally have got interlinked to certain extent. Some economists believe that stock price trends precede business cycle stages where as certain other think that the correction in stock price factors in before the actual recession.
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