Boom Bust

A cyclical economy that alternates quickly between periods of economic expansion and contraction is termed a Boom-and-Bust economy.

The term “Boom and Bust” is a term used in economics to describe highly cyclical economies. Typically, Boom Bust economies alternate rapidly and frequently between periods of economic expansion and contraction. The various cycles last for differing periods. They also differ in degrees of severity between the peaks and troughs. Boom Bust cycles are a characteristic of market economies. They tend to occur when the authorities either lack or lose control of the levers to influence a country’s economy, such as Fiscal or Monetary Policy.