Videolezione sui grafici - I cicli economici

[Music] The national income of a country and all the main economic quantities connected to it such as investments, employment and consumption tend to vary over time in a non-regular and continuous way but through cyclical fluctuations. The economic cycle refers to the alternation of different phases of expansion and recession of the economic system.

Expansion is the phase in which the GDP grows. Recession is the phase in which the GDP decreases. The situation in which the economic system finds itself at a given moment of the cycle is called a cyclical situation. When the system is in the expansion phases, it tells us that the cyclical situation is favorable or high. When

the system is in the recession phases, it is said that the cyclical situation is unfavorable or low. Let's see how the phases of the economic cycle alternate with the help of a graph indicating the GDP on the ordinate and the time on the abscissa. Let's start with the recovery phase which falls within the

expansionary period of the cycle. In the recovery, the economic system emerges from a situation of depression. Consumer demand for goods begins to grow. There is a continuous increase in the volume of production, employment and production factors. and investments. The expansion of production is caused by expectations of greater profits again and is strengthened in a climate of

general optimism and confidence in the future. As a consequence, investments increase on the one hand and demand on the other. This expansion process continues until the economic system reaches the peak that corresponds to the full employment of resources, i.e., of men and machinery. In the old graph, this corresponds to the moment of one on the timeline.