1. Expansion: Expansion is the first step in a new business cycle. A period of expansion reflects an increase in income, employment, production and turnover. Money flows more easily through the economy, and this is a boom period for investment. People go into debt and pay the same back on time. But, as just described, the positive effects of the resumption of business development in the business sector have also spread to the household sector as part of the ongoing economic recovery. In terms of employment, full-time employees have increased and the decline in the number of regular employees has decreased. From a macroeconomic perspective, this behaviour has proven to be an underlying trend towards increases in employee compensation and household consumption. 2.
Peak: The second stage is the „peak“ phase, when all economic indicators are at their peak of growth. Right now, the economy is expected to reach its peak. Prices have reached their highest level, after which the economy stops growing. In this phase, people and companies restructure their businesses when the economy reaches its peak and reverse the growth trend. The current economic recovery has not only followed the basic behaviour of past business cycles, but is also different from traditional models of economic recovery in that it has been accompanied by structural adjustment, which has dissolved excesses of employment, productive capacity and indebtedness, following the bursting of the economic bubble. Even though growing inequality in households is mainly due to an aging population, there are analytical results that suggest that inequality has increased compared to younger generations. Although it is indeed not possible to clearly confirm that economic inequality between younger generations has increased in terms of households, it is possible that this will lead to inequality for which corrections will be difficult in the future and, therefore, appropriate policy responses will also be strongly recommended. However, this would not mean the elimination of inequalities through outright remuneration of income; However, what would be considered desirable is proactive employment adjustment and supports to help younger generations find employment. During the current economic recovery, companies have made serious efforts to reduce surpluses in employment, performance and debt. By conducting active restructuring in the employment sector, companies have also made efforts to restore their business base by seeking to repay interest-bearing debt while curbing capital investment.
To some extent, such behavior may probably have deviated from the typical action of Japanese companies, but in reality, it can be understood as the result of the optimal action taken by companies on the basis of the principle of profit maximization. With regard to this evolution of economic disparity, it is possible to deepen its understanding by interpreting it as a structural phenomenon in the medium and long term, rather than limiting it to the duration of the current economic cycle alone. Measured against the trend of income disparity from this perspective, statistical indicators showing economic disparity in Japanese society as a whole over the past two decades have followed an upward trend. However, it is believed that the widening of the historical income disparity is largely due to changes in the structure of the population, i.e. the persistent ageing of the population. The higher an age group, the greater the economic disparity considered in the distribution of income and, as the proportion of older persons increases due to the continuous aging of the population, this inequality acts as a force to increase the inequality of society as a whole. On the other hand, no major change in the degree of disparity was observed within the same age group. Business cycles are essentially fluctuations in the level of output of economies above and below the trend of equilibrium levels. But why do economies fluctuate? According to experts, many factors must be responsible: if we compare the economic cycles of foreign countries since the early 2000s, the fluctuating force has shrunk in the midst of an increasing mutual correlation. Such behavior is derived as an attribute of factors such as the increase in global economic movement, including the financial aspect and the increasing precision of macroeconomic policy management.
In an economic cycle, „expansion“ is measured from the bottom (or bottom) of the previous business cycle to the peak of the current cycle. A recession is measured from the peak of the current cycle to the bottom of the next cycle. The current phase of economic recovery is also remarkable due to the long duration of the economic recovery. It is a period of economic recovery that has lasted for more than four years, and although it is briefly interrupted on the condition that it settles twice, it is considered relatively long compared to the average economic cycles of the post-World War II period. The long duration of the economic recovery, the fact that the Japanese economy has increased its flexibility thanks to the progress of structural adjustment (as we have just described), is cited as one of its contributing factors. However, the average growth rate for the period was no more than 2 percent, compared to the double-digit growth rate recorded during the Izanagi boom, which represented the longest economic recovery in the past. During the Izanagi boom, the Japanese economy experienced strong growth as well as various changes in the social structure, but compared to the current economic recovery, given that there is the characteristic of a mature economy returning to a normalized state through structural adjustment, it may be necessary to understand the diversified characteristics of the economy from various angles other than the duration of the economic recovery. An economic cycle refers to the different phases of the rise and fall of the economy. An economic cycle is also known as an economic cycle or trading round.
The different phases of a business cycle reflect the fluctuations in economic activity that an economy typically experiences over a long period of time. An economic cycle usually lasts 5 and a half years. The different phases of the business cycle are: 4. Depression: Growth continues to decline with rising unemployment. Industrial production is declining, businesses and consumers are unable to secure funds on credit. A decline in activity can also lead to bankruptcies. The period is also characterized by low levels of business and consumer confidence. (iv) Unforeseen disasters can lead to fluctuations in economies.
At the same time, vocational training of various types, which employees experience in workshops after entering the world of work, also plays a major role in improving human potential. In companies that have so far placed more emphasis on Japanese-style management, there is a strong tendency to emphasize on-the-job training and use it in workshops. The trend towards corporate restructuring has emerged as a phenomenon of diversification of employment styles from the point of view of the household sector. This has raised fears that employment under deflation will increase rapidly due to the downward rigidity of nominal wages. In fact, however, a serious situation resulting from the rise in unemployment has been avoided. This is due to the fact that the increase in unemployment has been mitigated due to the decline in the average wages of irregular workers, as well as wage cuts for full-time employees (and also a reduction in the employment of regular workers). Measured in terms of employment styles, the proportion of part-time workers in particular increased in the initial phase when restructuring was underway, which is also seen as a downward force in average wages. (ii) The absence of creative destruction (i.e. Innovation) can cause the economy to collapse or slow down its overall output. 3.
Recession: The stage of contraction of the economy is called recession. At this point, there is a slowdown in production and weak growth in sales and profits. There may be a decline or negative growth in turnover and the resulting unemployment. 6. Recovery: Recovery is the phase of economic recovery. Prices are low due to the earlier phase of the depression. Low prices usually lead to an increase in demand for goods, which increases production, which leads to a recovery in industrial production. As a result, there is a growth in loans. This also translates into an increase in employment and incomes […].