Coping with economic cycles

Managing business cycles

Description

Coping with economic cycles involves implementing adaptive strategies to mitigate the adverse effects of economic fluctuations, such as recessions or booms. Essential actions include diversifying income sources, maintaining financial reserves, adjusting spending and investment plans, and enhancing workforce flexibility. These measures aim to stabilize operations, protect livelihoods, and ensure organizational or community resilience, enabling rapid response to downturns and effective capitalization on periods of growth, thereby reducing vulnerability to unpredictable economic shifts.

Context

The theory of cyclic nature of economic expansion and contraction was formerly influenced by the cyclic nature of production of food and some primary commodities, and the simplistic dilation and contraction in the supply-demand market model. Currently it is conceived as an outcome of over-correcting government (intervention) policies.