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Economic cycles, or business cycles, are decreases in consumption that cause constriction in the demand for production of marketable goods and services and thus reduce new capital formation throughout an economy. Economic cycles are characterized by a period of stagnation or decline (recession) following a period of expansion or boom. They are a result of a combination of the shift from human labor to capital as the predominant input to production (industrialization), and the concentration of ownership of capital in few hands (capitalism).

In the United States in the nineteenth century, downturns were usually set off by temporary overcapacity that outstripped demand. In Europe in the nineteenth century, and in the twentieth and twenty-first centuries throughout the world, downturns have usually been triggered by the bursting ...

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