from Wiktionary, Creative Commons Attribution/Share-Alike License.

  • noun economics, finance, business A pattern of high prices in a given market or in the entire economy followed by ruinously low prices, falling production, and bankruptcies by producers.


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  • In economics, the term boom and bust refers to the movement of an economy through economic cycles.

    The boom and bust cycle describes the cycle of economic upswings and downswings in the business economy and is considered inseparable from capitalism.

    According to most economists, an economic boom is typically characterized by an increased level of economic output, a corresponding increase in aggregate demand, falling unemployment, and often, a rise in the inflation rate. During busts, or recessions, aggregate demand is low, inflation decreases, unemployment rises and national income falls. In extreme recessions deflation (a sustained fall in the general price level) may occur.


    February 6, 2008

  • Monetarists would argue that in trying to smooth out the business cycle, governments in fact distort it further, creating bigger booms, and more painful busts. If they just butt out, then the economy would grow close toward its long term trend, without the rollercoaster ride, or so the theory goes…

    February 6, 2008