Frequency and Duration

Fundamentals of Market Investing by Adam J. McKee

The National Bureau of Economic Research (NBER) has designated nine business cycles over the years from 1945 to 1991.  During this period, the average business cycle lasted about five years; the average expansion had a duration of a little over four years, while the average recession lasted just under one year.

NBER Definitions

A recession is a significant decline in activity spread across the economy, which lasts more than a few months and is visible in industrial production, employment, real income, and wholesale-retail sales.  A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.  Between trough and peak, the economy is in an expansion.  The expansion is the normal state of the economy; most recessions are brief, and they have been rare in recent decades.


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