Economic History and the Business Cycle Research Paper

Economic History and the Business Cycle - Research Paper Example Recession is usually visible in GDP, house hold income, industrial production, employment, and wholesale/retail sales and profits. The macroeconomic indicators fall while bankruptcies and rate of unemployment increases. Recession starts just after the economic activities reaches at the peak and ends as the economy reaches its trough. Between troughs and peak, the economy is said to be in an expansion. The expansion signifies a state of normalcy for an economy. This is a phase of business cycle which is characterized by general rise in economic activities. The gross product expands as jobs are created and incomes generally rise. The periods of recession and expansion occur in what is known as the business cycle. After recovering from a period of recession ending in the year 2000, Turkey has generally experienced a strong economic growth since 2001, experiencing important gains in income and living standards effectively making it an upper-middle income country. From the year 2001 to 2008, Turkey’s GDP per capita increased from US $3057.8 to US $10379.5 respectively which marked period of economic growth as shown in figure 1. This was followed by the trough of the recession in the year 2009. The period of expansion was experienced between the years 2010 to 2013 where GDP growth resulted into creation of more jobs thus reduced unemployment rate as illustrated in figure 3. Generally an increase in GDP should signify an increase in economic growth of a country which should be characterized by creation of more jobs for the citizens and low inflation rates. However between the years 2001 and 2008, the rate of unemployment rises, contrary to the GDP indicator. On the other hand, inflation falls between the years 2001 and 2007, while experiencing a sharp increase in 2008 despite the GDP still growing in that same year: in 2008 the prices of goods increased despite an increase in GDP, as shown in figure 2. In the