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Imperfect Information and Aggregate Supply*
Imperfect Information and Aggregate Supply*

... In  his  Nobel  Prize  lecture,  George  Akerlof  (2002)  said,  “Probably  the  single  most  important  macroeconomic relationship is the Phillips curve.”  He is surely right that this relationship has played a  central role in many business cycle theories over the past half century.  At the same  ...
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Business cycle

The business cycle or economic cycle is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms), and periods of relative stagnation or decline (contractions or recessions).Used in the indefinite sense, a business cycle is a period of time containing a single boom and contraction in sequence.Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity can prove unpredictable.A boom-and-bust cycle is one in which the expansions are rapid and the contractions are steep and severe.
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