Economic cycle was a big debate in the 70s through the 80s and still remains one of the subjects that continues to attract hot fierce criticism. Although many years have passed, it appears that quite a number of people including entrepreneurs and business leaders still do not have a better understanding of the subject. Because of that, Stephen Bittel, the founder and CEO of TerraNovaCorp helps his colleagues understand what economic cycle means. In his view, Stephen Bittel says the best way in approaching the subject is by breaking it down into simple stages.
Stephen Bittel goes on to explain the four stages namely expansion, which evidently is the first phase when a business has been established. The second phase is peak. As the name suggests, at this point, the business or the economic status of any firm, startup, country, region, or even economic block is doing great – at the peak. Coming in third is contraction. At this point, the business is likely to continue showing great results or it fails towards trough, the last phase. Stephen Bittel continues with his explanation when he says that during the first phase, expansion, a business or the economic status of a business attracts many positive results. Some of the positive results the TerraNovaCorp is taking about include employment of additional workforce, an upward projection of product and prices, which leads to economic growth. In the end, this phase is set to peak.
During contraction, Stephen Bittel argues that the business is likely to coil back. Yes, the business contracts. At this point, employment stalls, some employees may be laid off with some losing their jobs completely. Prices of products as well as service delivery go down because the workforce is low as well. The TerraNovaCorp CEO winds up by describing the last phase, trough as the worst when things are quite low but the good thing is the cycle restarts again.