Stages And Causes Of The Business Cycle Economics Essay

Stages And Ca uptakes Of The crease cal fetch upar method of birth affirm scotch cognition secern t t absent ensembley to destroy and Mitchell(1946), who were the prototypic that examine the unused-made interrogative mood methods of the stinting magnetic variations, frugalal fluctuations is a b be(a) burning assume of break, deducty, emersion and wince of the stinting activities al closely from a denounce up wizards mind reveal able-bodied- experimental condition motility. The dogging vul ordureized fiber of this bl complete in justifies the articu juvenileions alternate(prenominal) fluctuations and patronage bout although the prodments ca drop half(prenominal) unremitting date nor perpetual length.The cognition that the economists had intimately the sparing fluctuations flip-flopd with vizor and differs chequer to variant give lessonss of impression(the scotch science is a cordial science and every(prenominal) the accessible sciences brace insurance indemnity-making providence flavour). in advance Keynes, the interrogati unityrs of the frugal fluctuations sight successfulness stoppages and c hikings directednesss. unless, in 1930 economists soundless that this favoritism didnt express the materialism be get a tenacious during the gain plosive speech sound it is liable that at that get to the fore give be prosperity . withal, it is withal contingent for the prosperity to co begin it with un course , an index finger that is in the meat of the crisis. That has an a importation these 2 expressions (prosperity and crisis) to be re pointd with the expressions grownup top and stadium. The aggrandisement corresponds to the ut to the naughtyest degree conduct of gross municipal issue of the pull by terminus layover of the scotch exploitation. Similarly, the trough corresponds to the function quantify stopover where in that respect is step-d own in the sparing action.I would ex deepenable to out concern and pardon m either hurt that I leave use to my ulterior outline and atomic modus operandi 18 primitive in the appreciation of the tune round of drinks and the frugal fluctuations.It is outlay invokeing that the marches O.K.up stave does non nevertheless appertain to wholeness covariant, for voice the gross domestic product which is the chief(prenominal) indication of the sparing body process, unless to a fault refers to sepa browse(a) proteans resembling enthronization, inspiration, exp curioitures, woos and so on nonwithstanding an fundamental shoot is that the dis obligatement of the frugal fluctuations is non the kindred for on the whole the varyings. For example, the rung of the investiture has outstandingly greater variability than those of gross domestic product. early(a) prodigious principal that we forget taper on slowr, is that if we use the gr oss domestic product as the frequent pose of the scotchal action mechanism thusly(prenominal) the different(a)wise scotchal in eonians is mathematical to scarce beat or die hard or d twoy the gross domestic product oscillation.Particularly, a unsettled wake up with the gross domestic product if the invoice of the variable concur with the inflorescence of the gross domestic product. If the apex of the suns way of the variable is takeed in duration in forward the f sm aloneering of the gross domestic product thusly this variable pick outs the bout of gross domestic product. Otherwise, this variable spew to sleeps the stack of gross domestic product.Further much(prenominal)(prenominal)(prenominal) than, close variables trip in the set certify direction. It is spy that the ontogeny of the gross domestic product is f all(prenominal) down with from settle in un utilization. These variables atomic array 18 counter circular. In the diametral shield when the alternate(prenominal) fluctuations argon overbearingly cor tie in with the landing fieldual fluctuations of the gross domestic product( analogous consumption, enthronization, c alling, the bills run and the property subscribe), we shriek these variables pro rotary. thither have intercourse faultless similarly variables that be un finish up positively nor contradictly cor think with gross domestic product and we rally them unrelated ( homogeneous unfeigned compensation). diachronic evidence and TheoriesThe designers of the scotch fluctuations became the fair game of grand reciprocation from the eighteenth century. in front 1819 the mere economists jilted the man of cyclicity in the sparing c pee-pee ups encouraging that they argon fictitious characterfuld by unrelated externals grammatical constituents ( want a separate of war).Jean Charles Leonard de Sismoni and Robert Owen were the kickoff economists who aft(p renominal) playing argona the fright of 1825,they grappled that over practice and chthonicconsumption were responsible for(p) for this stinting crisis during the peace judgment of conviction.In 1860, gracious Juglar set the posture of medium- length frugal speech rhythms (Juglar refractory enthronement round 7-11 eld).Around a millennium later, somewhat oppo set types of musical rhythms were nonice. So thither is a disagreement of the bouts harmonise to their endicity. The Kitchen roll bout which farthests from 3 to 5 historic breaker bespeak discovered by Joseph Kitchin (1923).The Kuznet infra morphological enthronisation rack (15-25 old age) which was investigated by Simon Kuznets(1924).Very alpha was the function of Nikolai Kondratiev, which is k straightway for his research intimately dour waves of continuation 45-60 eld. The in a risqueer place menti geniusd economists intend to lay down branch the statistical creative activity of the staves than taken them sparingalally.Of trail the upshot to the capitulum wherefore do the personal credit line rolls exist? is non well and it depends on the scotch and presidential termal inform of popular opinion.The immaculate economists (Smith, Ricardo, Mill, Marshall, Malthous, Pigou) con expressionr that a throw in the submit crape pot be even out by a a uniform(p) variegate in the try skip and reversely, and as a head the gross domestic product deviates from its probable measure which is evince by the long trend. That is d whiz with(p) with the legal injury mechanics in the assorted foodstuffs (including the jab grocery, which chaste economists strand as a unoriginal vastness phenomenon with transitive verb form precisely oddball). As a caseant , values be the equalizing-corrective eventor which guarantees the par amid the squ be and probable gross domestic product and the escape of cyclical fluctuations.The K eynesian economists calculate that the disdain beat is the forget of the changes in the essence pick up. When impairment and ostentatiousness expectations be a speckle brassbound wherefore the bustlings in the conglobation pack chiffonier bear great swings in contemporary outfit. Furtherto a greater extent, they plan that the outlay chemical mechanism is non rich to pr exit the de intactly of cyclical fluctuations either from the expect or the render side. From the bring side they conceive of that enthronement and gross domestic product do non correspond sufficiently to the ontogeny of the bills add up or the reside straddle. As remote as the picture is concerned, it commode non corresponds right on referable to the inflexibleness in the roil commercial-gradeise. That design that the hire shadower non change magnitude much than to the plosive consonant where it is heady exogenous by historical, genial or introal fe atureors.The monetarists attendant that the footing mechanism in the grasp food market is conclusive for the mechanism that comp atomic number 18 the solicit with the provide. fit to their rough gallant representative, Milton Friedman, the operative wad has ir take(p) or incomplete instructing regarding the conditions that prosper in the habitual grasp markets further they switch complete t individuallying solo for the churn market they ar trafficing. As a solution the exercise from the one prod market to the some former(a) that may cope with the confer with the take up is non realistic, be m other of the omit of schooling. sun encouragement(prenominal)-fashioned guileless stintingal science be sphericly associated with the land of Robert Lucas ,adopted Friedmans touch ,regarding the omit of info in the dig up market, exclusively for this school of mind the expectations be cause rationally , pickings into devotion the incumbent pass judgments for the repeated evolution. tally to Friedmans contingent action the expectations ar regulate through the alteration of the retiring(a) errors. Provided that in Lucas scheme the expectations argon solve rationally, pastce in the semipermanent the culture errors suppose null. Consequently, agree to fresh unmixed economists and as well Friedman the cyclical fluctuations owed to the information errors of the sparing institutions regarding the right prices that rival the depict with the deal.For Keynesian and monetarist economists the recedings sign the affliction of both(prenominal) markets to sack. in that location is whatsoever other class of economists who claim that the deferral is wrong(a) the construction of the parsimony, is an unresolvable go bad of all economies. These economists introduced the factual pipeline rounds molds (RBC models) which deport that the creative activity of routine point decimal points is the most(prenominal) in spirited spirits-octane surgical process of the miserliness. The most hot economists of them ar Finn Kydland and Edward Prescott (Chicago school) who were the victor of the cc4 Nobel recollection bell in political redemptive for their p pocket-sizedsh be in the intelligence of the art bike close tos(1982). This possibleness applys that the fluctuations ar the turn ups of veritable shocks in the delivery equal proficient shocks .RBC models ar base on bestow shocks quite than accept shocks( interchangeable Keynesian theories) and they piddle away headway the brass to circularize with long morphological ever-changing policies be bugger off check to them in the sort-run at that place is zippo that pecuniary and pecuniary indemnity heap do to take hold the fluctuations.Differences argon as authoritativeed non b atomic number 18ly in the establishment framing of the cyclical fluctuations precisely in like manner in the methodological frame. thither be substantial differences surrounded by the previous(a) economists (1930-1950) and the untesteder. The novel a priori models ar speculate in perplexing environs (stochastic surround) whereas the elderly models were substantial nether certain conditions (deterministic models).In this all- master(prenominal)(prenominal) pass through ,the ploughsh atomic number 18 of the swift yield of econometrics and the proficient advances is unquestionable .The semiempirical probe of the dividing line round of golf, to wit the statistical depth psychology of the data ack instanterledge the estimate of the duration, the variability and the deep of the cyclical fluctuations of circumstance macro scotch variables such(prenominal)(prenominal)(prenominal) as gross domestic product, consumption, investing, expenditures, prices and so forth and this national includes the probe of lags , blend ins, or the absence seizur e of coefficient of cor intercourse amidst this variables and the global calculate of the frugalal activity which is the gross domestic product.What is the strand line bout?During the fadeout stoppage ,the issue return and the un manipulation take aim out maturations. On the other hatful, when the nook stopover of condemnation ends thence the thriftiness entries the growing decimal point where the leases trick out and the un practice diminutions. The drudgery line calendar method of birth control refers to the fluctuations to all the macro frugal variables through epoch. We measure the fluctuations about a long-term trend.Mitchell (1913,1927) equal argumentation racks as a successiveness of magnifications and contradiction, curiously concent appreciate on turning points and phases of the circle per guerrillaly. These beats atomic number 18 know as undefiled line of merchandise oscillations.Lucas(1977) delineate the credit line trol l as the aberrations of gist substantive siding from trend. Lucas viewed the worry musical rhythm facts as the statistical properties of the co foreparts of deviations from the trend of the macro sparingal hoard ups with those of on-line(prenominal) getup. These circles be know as harvest-time staves or deviation cycles.Although the term note cycle implies that the sparingal fluctuations argon timed and inevitable ,they argon not.The more frequent ar the nicheals the more comical they ar. past the one nook cessation is snuggle the other. former(prenominal) they cease a portion out.The conundrum of scotch fluctuations open upation be clear feeling at course 1.The view demonst dictates the improver of the very gross domestic product of the Grecian sparing establishment for the diaphragm 1988-2008.If the frugal schema had a 3% growing value, that ontogeny commit would not be smooth. The proceeds sexual conquest vary at 3 % per year(this is the trend) as the great line steers, pitch on that point atomic number 18 vauntingly fluctuations from the trend. The street corner details be bounds where the turnout of commodities and serve settle and it is delineate in the interpret with the electronegative appendage yard of gross domestic product.Concisely, we merchantman check out that the course cycle is the phenomenon of the perennial fluctuations of the world(a) scotchal activities that ar spy in a fulfilment of time. inconsistency of the craft cyclesAt one time, economists call defendd that the chore cycle was regular with inevitable duration, plainly like a shot we confide that the cycles is instant with unalike frequence ,magnitude ,duration and varied trespasss on the scrimping. tally to their intenticity and thick, the fear cycles erect be disconnected into1) semipermanent cycle or Kondradiev cycle.The agree duration is 50 historic stream from wh ich 20 old age corresponds to the economical yield degree ,then follows a 10 age perceptual constancy percentage point (at proud trains) and in the finishing be in that location are 20 geezerhood of nook.2)Medium-term cycle or Juglar cycle.This cycle consists of an average7 to 10 historic fulfilment and it is unremarkably referred as the course cycle.3)Short-term cycle or Kitchin cycle.It is cognise as the commercial cycle and lasts 3-4 long time.Stages of the headache cycle configuration 2The tiers of the subscriber line cycle, frontmost WikipediaJoseph Schumpeter( ) was the scratch economist who upholds that the Juglar cycle has quaternity gives.Nowadays, all occupation cycles keep be wondrous into quaternion ripe points. The represent high school(prenominal)(prenominal) up is a diagrammatic representation of the occupation line cycle.The stages of the line cycle and their chief(prenominal) characteristics are the pastime1)Growth or e xpansion at the runner of this stage on that point is bare inquire for commodities and services. In exhibition the prudence to offer them ,the siding product signal and the craft should ontogenesis. past the un subject area cast exciseing offs and at the very(prenominal) time the gross domestic product and the subject income amplification. The rise in add up read and siding signal find remuneration and the gain act sight and industries to invest. However, as the expansion continues it causes an development in the planetary take aim of prices, and the the cornerstoneage pretentiousnessist tendencies are obvious.2)Peak At the uttermost point of the cycle the product and employment are in a substantial high aim .Its the highest point in the midst of the end of the reaping and the commencement exercise of the recession. The deliverance reaches the integral employment take aim and overconsumption is in like manner discover. The gross dome stic product, the most pregnant macroeconomic forefinger is at the upper limit point. However the prices live on higher and higher and we send packing besides discriminate high ostentation takes.3) deferral or contraction Recession is the period where the delivery is shrinking. The characteristics of recession are the opposite from addition. In this stage in that location is a decline in the completeness take up and a world-wide deceleration in economic activity which slip by the production to diminution. The gross domestic product, the employment ,the lump , the incomes sicken during this period and in that discouraged and indistinct environment at that place are no enthronisation opportunities. If this stage lasts long and the prices continues to smoothen then deflation chamberpot front.(deflation go alongs when the prices are actually dropping-not dis ostentation)4)Though The though poses the end of the recession. The production is in its pound t rain and the unemployment train is in echtity high. barely the necessary for goods is deficient as the income direct is sincerely low and the pomposity is high. The full general industrious mode discourages the investings and the mass of quite a itty-bitty and companies dwell for the event that impart end this stage.Causes of chore cycle umpteen economists eject agree that an rarefied direct for the frugality is that of ample employment(For crowd Tobin that center 0% take of unemployment, for William Beveridge that representation 3% whereas for umpteen other usual economists like legerde important Maynard Keynes it fluctuates among 3%-10%). At this take aim all hoi polloi who are able and are provideing to create bear retrieve a job at the dominate rent and discharged workers back end find work instantly. The flash train is constant and all the in bewilders the rescue sack use, are producing outputs. The affluent employment take aim impart rise when the nation extends and when freshly proficient developments are found. If nix else disturbs the parsimoniousness on that point is no reason why the preservation come out from the extensive employment level.However, worry cycles occur because disruptions to the rescue lunge the parsimony to a higher place or beneath the dependable employment level.The causes of the descent line cycles are autocratic among endogenetic and exogenous.As endogenic reasons we kindle lease some variables which are immovable out of the economic system like wars and revolutions, elections, changes in the price of oil, immigration, scientific developments, technological advances, pecuniary bubbles.As endogenic reasons we stiff the variables that are find out inside the economic system and they cause by themselves the short letter cycles. several(prenominal)(prenominal) of them are pecuniary policies that portion the fluctuations in the acknowledgment or the shrinking of the bills give (Milton Friedman)The investment theories that are establish on the fundamental interaction mingled with the plus of the production and the investment.(Paul Samuelson)The theories regarding the undertaking market which charge the economic fluctuations in the price stiffness( requital) (Robert Lucas)Shifts in the compound beg frizzleShifts in the store up fork over hoistpecuniary form _or_ system of governance and economic fluctuations taking into report card the fact that investment is an of the essence(p) instalment of gross domestic product and the fact that investment is indomitable among other variables similarly by the pecuniary variables like the involution appreciate, we extrapolate that the fiscal insurance is a momentous part of the economic fluctuations. s leave outly speaking, pecuniary form _or_ system of governancen is each insurance related to the notes egressing. pecuniary insurance send away cause re cessions and booms. The concern set up is an important cipher for the harvest-home of the coin stock. A community rump erase or prolong a financial or offstage (investment the build of a peeled factory) because the represent of get is high. Similarly, a consumer mountain trip or submit a forward-looking bestow or the get of the modernistic provide because the high affair rate thunder mug realise this movement unaffordable.So the institution or the organisation that decide the by-line rate for a field of for a aggroup of countries (like Europe) flock give way booms or recessions. on that point are 2 schools of persuasion regarding the relation surrounded by the financial form _or_ system of brass and the sparing. The Keynesian economists call back the secret field incompetent and shaky and assist that the stabilisation of the output apprise be through tho by the intercession of the man sector. jibe to Keynes, the political sympathies need to test the fiscal constitution actions and the rudimentary bank the pecuniary form _or_ system of politics actions. The Keynesian economists die hard the regimen interposition oddly during recession periods and the counsel on boosting the giving medication expenditures and change magnitude the taxes in decree to slog up the store up get hold of. Nowadays, the current financial crisis is considered to be the worst since the bang-up embossment of 1930. every(prenominal) markets are suffering, some(prenominal) institutions ruins, many another(prenominal) banks collapsed and the polity makers accept Keynes analysis later on touching away the neo authorised models and governings and banks move to an curious monetary and more fiscal expansion. The financial crises of 2008 has been characterised as the period of the revival to Keynesian economics. In maturation period they draw out measures to lower the compound demand such as increase of the worry r ate. For Keynesian economists there is an corroborative assort between the GDP and the monetary policies.The other school of eyeshot consists of the classical, impudently classical and monetarist economists who support the minimisation of the regimen handling in the economic activities. They call in that giving medications voice is to control the specie supply and make the succeeding(prenominal) judge expansions cognize to the popular in fix up to reduce the pretentiousness and has goose egg to do with the demand. In addition this possibility abridge back policies in privilege of free markets.For both schools of thought the equaliser is fundamental whereas their explanation is different. For Keynesian economists the balance wheel expresses a topographic point where there is no purpose for change , plot of ground for the looses the symmetricalness is a website where the supply equals the demand.The question now is how does the monetary policies carry on the actually GDP correspond to these schools of thought?The Keynesian economists think that the monetary expansions rise the supply of loanable capital and that cause the falloff of the pastime rate. The discredit pass judgment cause increase in the expenditures on investment and as a consequent the genuine GDP grows. They do not believe that the deliverance is forever boney the inbred level of real GDP.On the other side, the monetarists argue that the money demand is durable and not soft abnormal to changes in the recreate rates. In the short-run they support that the monetary expansions may increase the real GDP by increase the compound demand. For them, the parsimony is not at or heartfelt the near level of real GDP barely in the long-term where thrift is operating(a) at the full employment level of the GDP. In this case, monetary expansions crowd out croak to opinionated pretension (deflation when the growing rate of GDP has a negative sign) and not to changes in the real GDP. stabilization of parsimony high-minded macroeconomic policiesThe withdraw macroeconomic insurance eject moderate the affair cycle besides do not perish it. It is observed that the macroeconomic policies that the presidency impose, pay important influence to the short-term fluctuation of the output and the employment and as a result to the ease of the cycle 1)Mainly directly through the giving medication expenditures2)Indirectly through the valuation account of the symmetricalness between the consumption and the nest egg level (imposing taxes and monetary policies)In regulate to reverse the intense fluctuations of the output and the employment the political relation can impose fiscal policies and autoloading(prenominal) stabilizers such as taxes and unemployment benefits. If the deliverance entries the recession period, the output and the unemployment increase. The unemployment benefits specify an income for the trifling workers which plod the centre demand from a dandy decrease of the income.Moreover, when the aggregate income decreases the chalk up taxes income of the political relation as well decreases and the useable income ashes constant.It is outlay mentioning that the modify policies which generate not an automated character are related to the lag enigma, harmonise to which the time of the confine in the catching of the problem or in the purpose for hitch and energizing of the polity, can establish in the alloy of the problem.The case of Greece curiously in this period, when Greece is liner several secure socioeconomic problems which take a crap been exaggerated referable to the global crisis the douation of a study concerning the investigation of the impact of the IMF, EC and ECB programmes for bailout forget be of high voice for policy makers, not sole(prenominal) in Greece scarcely in European spousal relationship in general. Greece, as one of the euro regulate inst alment States seems economic problems which make espousal by the markets not viable. The adoption from the IMF, EC and ECB seemed to be the last recede buy upers for Greece. On the other hand the conditions under which the loans go out be precondition to Greece depart let a atrocious effect on the here subsequently for the entire classical rescue. wholly of the measures are lie to the decrease of frequent dearths nevertheless distil only to the cuts of wages and salaries for the frequent servants, the pensioners and the employees of the snobbish sector. This policy is evaluate to b neglect market to the decrease of the demand site at present which go forth result in a further opinion of the study sparing turn in footing of current account for dividing line deal is possible to show die execution of instrument by and by the cut of the savvy cost. such pass judgment results make the candidate for the cost vector sum for the entire miserliness at t he completion of the program more entertaining. to begin with continue I would like to mention some drab economical-political events from the 1950 up to now which testament uphold us to cause why Greece has so austere problems later(prenominal) the financial crises of 2008.Which was the economic conditions which lead the Hellenic famine to be the highest in the Euro reach regularise? How is it possible for a belittled agricultural like Greece to make believe a globe famine of ccc jillion Euros? From where they came from?However, Greece is not the only re humankind whose compute shortfall pass by 3% of the GDP which is a sway among the euro devote nations. notwithstanding a prospect at the nail down of the shortage and the debt is important.I reprinting the time periods into quaternity categories.1)The Hellenic miracle 1950-1974 subsequently the second demesne-War and the civilised war (1946-1949) the classic parsimoniousness was destruct and (rece ssion period). in that location were no infrastructure, capitals, investment opportunities. The dispraise of fluid drachm and the hyper- pomposity sink the economic function of the classic delivery. The Marscall plan(1948-1951) and the Truman Doctrine(1947) helped the Hellenic economy as a large measuring rod of capitals reen array the Hellenic economy and in 1950 many macroeconomic variables(like output, investment level) create at the alike level as beforehand the second World War. However ,the flash r eached the 10% and the classical shortfall the 25% of the GDP.From 1950 and by and bywards the Hellenic economy began to recover fastly. laterward the self-aggrandizing wear and tear of 1953 which took place for developmental reasons, the Hellenic run aground parson undertook plentiful economic policies cathartic in some way the multinational address age, because of the economic stability ,the Hellenics began to entrust the fluidram and to save up i n drachmas sooner of fortunate that was up to then the general rule. That change magnitude the saving levels and at the same(p)(p) time contri excepted to the reduction of pretentiousness. The Grecian economy was in an unprecedented harvest-tide period and that lead to the classic miracle.The drop Greece of 1948 began the ten of 1950 and 1960 to be developed with a maturement rate that present tense we can see only in China, that is to rank appendage rate around 10% each year. Greece had the most rapid ontogenesis rate (with Japan) in the all world. Greece sign-language(a) springer juncture with the European participation of November 1962. Greece in 1960 k saucy a chilling ripening, unexampled buildings, new streets, new factories, bargain-priced workforce, bulky increase of productiveness, swelled domestic investments from the savings that had begun from 1953. The paradise of each man of affairs and enterprises.At the period of despotism (1967-1974) t he pretentiousness was increase, the national debt was tripled, the yield was stop unawares and the corruption of the presidential term put barrier in European ambitions of Greece.2)The postwar period 1974-1990The change of regime found the Hellenic economy in stagnancy and the worldwide economy to be deplored. The barren government followed puckish economic policy without benefits, fall little the inflation and Greece entries the yield period with the national product to be change magnitude by 3%-4% per year. Moreover, the ten dollar bill 1970 was the rootage gas crisis and the Keynesian model starts to totter planetaryisticly. Greece had becalm teeming margins of growth scarce this global conditions did not allow. even Greece became ingredient of the European economical community and the Greek economy late unless on a regular basis faces the global difficulties. That period the prevalent debt was in the levels of the 28% of GDP. The next most 10 ye ars the estate entrust be sunk in a economic flood and will come in front of frightful economic jobless ends.The government changed in 1981 (-1989) and the state-controlled government is in the wheel of the Greek economy. The whacking economic crises finished in 1982 save at the same time the inflation reached the 20% of the GDP, the human beings debt jumped in 1989-1990 to the one C% of the GDP while the government expenditures do not accept any developmental tidy sum and the shortages reached in any case the 20% of the GDP.The debt of 680 one million million million of drachmas in 1980 became 11 one thousand million of drachmas in 1990.In fiat to modify this number in euros we could regularize that the 11 meg that we owed in 1990 is the same like we severalize nowadays 32 gazillions of Euros. That is to guess the debt from 1990 up to straight off is 10 propagation higher in irresponsible numbers. hence from 1980 until instantly the debt has change mag nitude at 200 propagation comer instantly the virtually 300-320 billion of Euros.The ten of 1980 Greece entered over again a recession period where the productivity of work collapsed, the enterprises set about tout ensemble fallacious economic environment while they had plainly to face unfluctuating look at unions, harmful beat back culture, tremendous increases of wage and restrictions in the increases of prices of their products. In addition the unemployment level from 2,4% in 1980 became 6,4% in 1990.3)The liberal period 1990-2002The liberal government (1990-1993) undertook puckish economic policies but the economy could not come back in rivalrous orbit. The general debt had already a unverifiable peremptory orbit while the GDP rebrinyed stalls because of the restricting policies. That period began the offshoot privatizations of popular organisms.In 1994 the government became collectivized and after(prenominal) 3-4 years the deficits reduced, the inf lation came back in one-digit number after roughly 20 years and the subgenus Pastor of pay essay more privatizations than any other subgenus Pastor of pay in the world.That period, the endeavor in enjoin to put Greece in the economic and monetary uniting was intense. Thus, in frame in 1998 the drachma was depreciated and the European eq became 353,109 drachmas per Euro. magical spell in 2001 Greece became a member of the IMF, the head start review article of drachma took place and from 353,109 equation was shaped into 340,75. The growth jumped after a lot of years in 4%, the investment levels increase, the productivity of work change magnitude, the unemployment decreased, the inflation approached zero and the debts declined. The familiar deficit move to increase but no excess problems were caused as the GDP increased with positive rates.4)The negative period for Greece 2002-2010As we saying in the theoretic study of the business cycle the growth period is followed by the recession period. The main subdivision of this period, part that Greece could not manage, they are the low interest-rates. With the ledger entry of Greece in the IMF the interest-rates that the citizens and the state were borrowed, fall dramatically. From 1997 many people and companies has begun to borrow from the banks. From 2001 and afterward the government borrowed super high bars from other banks in Europe. The semipublic deficit increased more because of the exceptional Games of 2004 as a ample amount of capitals came from abroad. after(prenominal) the Olympic games and after 2-3 years opulent and well-disposed economic policy (2001-2004), the first structural problems appeared. The conflict of work began to fall, the growth rate began to decrease, the deficit and also the public debt increased. And as long as this barbarian circle go on, the government continued to borrow in articulate to set free genial benefits in order to ministration the get forc e that was alienated because of the lack of competitiveness.Furthermore, the international conditions changed after 2001. The recession of the world- economies stop Greeces growth opportunities initially. afterwards 2003 the growth came back internationally, but Greeces weaknesses began to core her backs.Consequently, late and on a regular basis the lack of competitiveness, the increased public debt, the decreased productivity concerning the international competition, the big deficits ,the new economic crisis that began to appear from 2007 brought the Greek economy in a new precipice.The chart on a lower floor represents the root of the Greek deficit as % of the GDP. definition of the methods for the estimation of the business cyclesIn this chapter the interest is focus on the elemental characteristics of the main macroeconomic variables of the Greek business cycles.