The common or popular usage boom-and-bust cycle refers to fluctuations in which the expansion is rapid and the contraction severe.
The first systematic exposition of periodic economic crises, in opposition to the existing theory of economic equilibrium, was the 1819 Nouveaux Principes d'économie politique by Jean Charles Léonard de Sismondi. Sismondi found vindication in the Panic of 1825, which was the first unarguably international economic crisis, occurring in peacetime.
Sismondi and his contemporary Robert Owen, who expressed similar but less systematic thoughts in 1817 Report to the Committee of the Association for the Relief of the Manufacturing Poor, both identified the cause of economic cycles as overproduction and underconsumption, caused in particular by wealth inequality.
They advocated government intervention and socialism, respectively, as the solution.
As an example, the Committee has identified the period from the first quarter in 1980 to the third quarter in 1982 as a recession, despite the fact that real GDP was growing in some quarters during that episode and that real GDP was higher at the end of the recession than at the beginning.
As another example, the Committee did not declare a recession for 2001 or 2003, even though the data at the time appeared to show a decline in economic activity (though not for two quarters).
The reference dates of the United States' business cycles are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), which looks at various coincident indicators such as real GDP, real personal income, employment, and sales to make informative judgments on when to set the historical dates of the peaks and troughs of past business cycles.
See Data Sources The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP.
The Economic Cycle Research Institute (ECRI), founded by Geoffrey H.
Moore, who created the first index of leading economic indicators (LEI) in 1967, also determines historical international business cycle dates comparable to the NBER’s U.
(2) The continued strength of employment and the decline in the unemployment rate.
(3) The erratic behavior of automobile and truck production brought about by the shortage of gasoline and increases in its price and by the work stoppage in the trucking industry.