Economic Development Futures Journal

Tuesday, June 24, 2003

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Why Should a Business Rebound Work Now?

Most folks are tired of hearing that the business rebound is coming and then they see reports that it has once again stalled. Could the latest news be accurate that it will really happen this time?

According to Economy.com, the rebound is very likely this time around because the longer a rebound takes, the more likely it is to occur soon. Business cycles occur because of excesses that build near the end of an expansion or contraction phase. To correct these excesses, such as the recent overinvestment in technology, market economies typically undershoot trend growth (the bust) to compensate for the previous overshoot (the boom).

Article link. (If you are an Economy.com subscriber.)

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