© 2000 John Petroff 
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1)- History of business cycles in the United States

Graph G-15.1 shows the pattern of business cycles in the United States from 1929 to 1998 based on data available from the Survey of Current Business.

Graph G-15.1

One can gather from the data in Graph G-15.1 that there has indeed been a cyclical pattern in the American economy but that the severity and length of the cycle has changed over time with cycles becoming less pronounced in recent years. Table T-15.1 presents data on length and level of unemployment during phases of expansion and contraction.

 

Table 15.1

Business Cycle Expansions and Contractions 1919-1990
       

 Contraction

 Expansion
Trough . Peak . Months Unemployed % Months Unemployed %
December 1914 August 1918 . . . .
March 1919 January 1920 7 . 10 .
July 1921 May 1923 18 . 22 .
July 1924 October 1926 14 . 27 .
November 1927 August 1929 13 . 21 3.2
March 1933 May 1937 43 24.9 50 20.1
June 1938 February 1945 13 14.6 80 1.9
October 1945 November 1948 8 3.9 37 5.3
October 1949 July 1953 11 . 45 5.3
May 1654 August 1957 10 . 39 4.4
April 1958 April 1960 8 . 24 5.5
February 1961 December 1969 10 . 106 4.5
November 1970 November 1973 11 4.9 36 4.9
March 1975 January 1980 16 8.5 58 5.8
July 1980 July 1981 6 7.1 12 7.6
November 1982 July 1990 16 9.7 92 5.6
March 1991 . . 8 6.8 100 4.5
Average peacetime cycles
. 1854-1919 . . 22 . 29 .
. 1919-1945 . . 20 . 26 .
. 1945-1991 . . 11 . 43 .
. Ave . . 19 . 29 .
Source: Statistical Abstracts of the United States 1999, page 569, from National Bureau of Economic Research, unpublished

 

Table T-15.1 shows business cycle average length of 48 months. There is variability in length of contractions (from 6 to 43 months) and expansions (from 10 to 106 months). It is encouraging to observe that the length of the contractions has decreased from 22 months prior to 1919 to less than 11 months after world war II. Even more heartening is the lengthening of the expansionary phases from 29 months prior to 1919 to 57 months after 1945.

See review questions Q-15B1.1 and Q-15B1.2.

See research assignments R-15B1.1.

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