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Persistent Business Cycles and High Economic Growth: How to Explain Their Long Concurrence in Modern Capitalism?


  • Victor Zarnowitz

    () (The Conference Board)


Prior to the second half of the twentieth century, the economy of the United States was distinguished by cyclical instability and low growth; however, since the end of WWII, business cycles have moderated, coupled with relatively higher economic growth. Characteristically, in the second half of the twentieth century, periods of expansion were on average six times as long as periods of contraction, with growth cycles being more symmetric in nature. This paper addresses several internal dynamics behind business cycles (mainly endogenous constructs) and outside impulses or disturbances (theories with major exogenous and stochastic elements) that can be attributed to modern business cycle depth and duration. Reasons outlined for this observed business cycle moderation include more effective countercyclical policy by the Federal Reserve, the lack of financial crises and major depressions marked by big business and bank failures, a shift in the structure of global market economies and the employment of automatic stabilizers.

Suggested Citation

  • Victor Zarnowitz, 2007. "Persistent Business Cycles and High Economic Growth: How to Explain Their Long Concurrence in Modern Capitalism?," Economics Program Working Papers 07-03, The Conference Board, Economics Program.
  • Handle: RePEc:cnf:wpaper:0703

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