The impact of a fall in demand centers primarily upon production and employment. Food and

clothing — consumer nondurables — are a different story. A family must eat and must clothe itself!

d) The criteria characterizing the medium-term cycle:

• the duration of the cycle and its individual phases

• the epicentre of the crisis

• the scope of fluctuations of base values of industrial production, volume of foreign trade, dynamics

Of prices, investments, stock of goods, etc.

By one of these values one cannot determine in what phase of the cycle the economy of this or

That nation (country) is to be found. Only by taking into account the sum of values one may correctly

estimate the state of a nation’s economy and the phase of the cycle.

e) The trends of modern cycles of business activity:

• the reduction of duration of the business cycle (from 11—12 years to 5—10 years)

• the decrease of depth and duration of the phase of the crisis

• the shift of the epicentre of the onset of crisis occurrences

• slow, gradual “creeping” into the crisis

• the synchronization of crises in developed countries

F) Business cycles of very long duration

Previously, the cyclic nature of the economy was interpreted in terms of medium-term cycles

Only. In the 1970s, economists became interested in the so-called long waves theory named after

N. Kondratieff, the Russian economist, who made important contributions in the 1920s to the