Many people look at a chart that goes up and down and imagine they see cycles. It's popular to speak of business cycles, for example. Unfortunately, it is not clear that anything in the economy oscillates such that it's appropriate to describe the system as having cycles.
You might have heard of Fourier transforms. Any time-series can be transformed into its sinusoidal components, even if a composition of waves is not a good model.
It's possible, and in my opinion more likely, that the business cycle is not a cycle at all.
You might have heard of Fourier transforms. Any time-series can be transformed into its sinusoidal components, even if a composition of waves is not a good model.
It's possible, and in my opinion more likely, that the business cycle is not a cycle at all.