Business Conditions Analysis (2) Essay Example | Topics and Well Written Essays - 500 words

Business Conditions Analysis (2) - Essay Example Along with this, the committee also take into consideration some of the minor economic indicators which do not reflect the overall economy like real sales. All these indicators are used in order to predict and analyze the economic activities which in turn facilitates in the process of identifying the peaks and troughs in the business cycle (NBER). National Bureau of Economic Research (NBER) has specific definitions for the recession and expansion, according to which the Business Cycle Dating Committee of NBER take decisions about the important turning points of the overall economy of United States. Because of these limited definitions, the committee is unable to distinguish between the actual shift in the business cycle from the interruptions of short level (NBER). The combine use of indicators reflecting overall economy and indicators which do not reflect overall economy can raise the concern about the double counting different industries and figures. However, on the other hand this method of using and considering both set of indicators facilitates the committee in the process of identifying accurate dates of the peaks and trough as some times the broad economic indicators can present conflicting results (NBER). The most common definition of recession which has been used by different financial and economic analysts is that recession is defined as the period of two successive and repeated quarters in which the overall GDP of the economy falls. This definition is commonly known as the two quarter definition of the recession. But, National Bureau of Economic Research does not use this two quarter definition. The Business Cycle Dating Committee gives high consideration to important monthly indicators and along with this combine different set of economic indicators in order to identify important events in more efficient and