An economic expansion is an increase in the level of
economic activity, and of the goods and services available. It is a period of
economic growth
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate o ...
as measured by a rise in
real GDP
Real gross domestic product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e. inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity ...
.
The explanation of fluctuations in aggregate economic activity between economic expansions and
contractions is one of the primary concerns of
macroeconomics
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
.
Typically an economic expansion is marked by an upturn in production and utilization of resources.
Economic recovery and prosperity are two successive phases of expansion, where as a recession is defined as two declining periods of GDP. Expansion may be caused by factors external to the economy, such as weather conditions or technical change, or by factors internal to the economy, such as
fiscal policies
In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variables ...
,
monetary policies, the availability of
credit,
interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, t ...
s,
regulatory policies or other impacts on producer incentives. Global conditions may influence the levels of economic activity in various countries.
Economic
contraction
Contraction may refer to:
Linguistics
* Contraction (grammar), a shortened word
* Poetic contraction, omission of letters for poetic reasons
* Elision, omission of sounds
** Syncope (phonology), omission of sounds in a word
* Synalepha, merged ...
and expansion relate to the overall output of all goods and services, while the terms inflation and deflation refer to increasing and decreasing prices of commodities, goods and services in relation to the value of money.
Expansion means enlarging the scale of a company. The ways of expansion include internal expansion and integration.
Internal expansion means a company enlarges its scale through opening branches, inventing new products, or developing new businesses. Integration means a company enlarges its scale through taking over or merging with other companies.
References
External links
"Business Cycle Expansions and Contractions", National Bureau of Economic Research
{{Authority control
Business cycle
Expansion
Expansion may refer to:
Arts, entertainment and media
* ''L'Expansion'', a French monthly business magazine
* ''Expansion'' (album), by American jazz pianist Dave Burrell, released in 2004
* ''Expansions'' (McCoy Tyner album), 1970
* ''Expansio ...
Market trends