How Does A Cycle Affect A Continuous Cycle Of Fluctuations And Change?

The housing crisis of 2008 can trace its origins back to the stock market trends of the mid- to late 90 's. During a period of extended growth in the stock market, increased individual wealth among investors led to generalized increases in spending, including in the housing market. With more disposable income in the pockets of consumers, the demand for housing increased in the late 90 's. Due to the fact that homes are large projects and their construction takes a large amount of time, the supply of homes in the market is inelastic on the short term. Because of the fixed supply of homes, as per the law of supply, which

go through cycles of expansion, recession and recovery. Monetary and fiscal policies can affect the timing and length of these cycles. In the expansion phase, the economy grows, businesses add jobs and consumer spending increases. At some point, known as

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

The economy, mainly in the capitalist system, is made by cycles. Over the history, the booms and busts faced by countries have called the attention of academics, who have tried to predict certain patterns and understand the economical behavior. Would the great depression of 1929 have the same effect if the presence of the government in the economy was greater? Was it possible to prolong the effects of the baby boomer generation? Could the mortgage bubble which started in the United States and resulted in the recent global financial crisis be avoided? While several questions stay open for discussion, history shows that economies will eventually face a downturn, but the fact is that the depth of the consequences will depend on their ability to respond to these shocks, or, how resilient they can be.

In this modern age we are all greatly affected by the core economic problem, as we know it. Scarceness of resources is the main economic issue, this is made worse by the world’s rapidly expanding population, “Resources are scarce but wants are infinite” (Anderton, 2008 pg. 2). In this essay, we are going to look into the real estate business, and specifically in London. This will enable us to understand the demand, supply and elasticity determinants in this market.

Housing bubble refers to a period in the real estate industry when the houses have the rapid increment in the price, and this price is above the average price.

In the United States of America the National Bureau of Economic research determines cycles of fluctuations in economic activity known as business cycles. According to the NBER, “there have been 11 business cycles from 1945 to 2009” (Investopedia.com). The average length of a cycle lasts about 69 months. The average expansion (the economy is growing in real terms) during this period “has lasted 58.4 months, while the average contraction (the economy is contracting, as measured by decreasing of industrial production, employment, personal incomes, and sales) has lasted only 11.1 months” (Investopedia.com). The most recent financial crisis in the United States of America is the Great Recession, which began in December 2007 to June 2009. This recession

Throughout history, economies have experienced times of high growth and low unemployment as well as times of little or negative growth and high unemployment. It is controversial whether or not these instances occurred from regular fluctuations in the market. These alternating up and down fluctuations typically occur over several years, with each individual cycle varying in length and intensity. These fluctuations are known as business cycles, which have four phases. When the cycle is at its peak, the economy is nearly at full employment and the economy is producing at or nearly at full

The global financial crisis has attracted considerable attention in recent literature. It is well known that the true origins of this financial crisis is that the over-borrowing of US households, especially to finance housing. It had serious affected the financial sector and the macro-economy. According to Shiller (2007), the main reason of the sub-prime mortgage crisis and the worldwide economic and financial crisis of 2007-2009 is the housing bubble. He also believes that the preceding bubble created dynamics and the dynamics of the crisis were self-perpetuating, although in the opposite direction. From the literature, we can see that conventional housing economics research virtually ignores interactions with the

Housing bubbles might occur in local or international housing markets. In their late stages, they are characterized by quickly increases in the valuations of property until unsustainable levels may relative to incomes, price to rent ratios, and other economic factors of

In macroeconomics, business cycle played an important role to show what a national economy is going; therefore, this essay will define what business cycle is and its characteristics. Besides, all of variables such as Real Gross Domestic Product (RGDP), inflation and unemployment rate and their behaviour in the business cycle will be also demonstrated in the second part. The final part of this essay will analyse and compare the situation of Australian economy and USA economy in period of 10 years since 1998 based on the concept of “the business cycle”. In addition, this is the writer’s opinion about the business cycle relied on these above data about exhibit Australian and USA economy performance.

As we dig further into the Real Estate industry we will now focus on the industry itself, the factors that influence the emerging market along with the benefits and risk associated with each

The period since 2007 onwards has been an extremely challenging one at the global level, with parties across the globe facing the consequences of the economic crisis. In the second half of the 2007, the over inflated real estate bubble burst, impacting the credit market, banking and ultimately all sectors of the global economy. The culprits for the situation created are still analyzed and the complete solutions to revitalization have yet to be found.

A study from Ray M. Valadez, “The housing bubble and the GDP: a correlation perspective” in Journal of Case Research in Business and Economics has been done to focus on the relationship between the Real Gross Domestic Product and the situation of Housing Bubble. In this research, the author has concentrated on the time from the beginning of losing trust in government from the financial institution. He emphasizes how much the housing bubble relates to the recession in the economy.

Timing of the business cycle is not predictable, but its phases seem to be. Many economists site four phases—prosperity, liquidation, depression, and recovery. During a period of prosperity, a rise in production leads to increases in employment, wages, and profits. Obstacles then begin to obstruct further expansion. Production costs can increase, helping create a rise in prices, and