US Economy And Its Short Term Economic Growth

Most of the losses have been broad-based and a significant amount of cuts were in retail food services and tourism. Although we can say employers have picked up hiring again in these actors but the employment right now does not match the Pre pandemic level.

Let’s look at some facts and Technical definitions

Short-Term Economic Growth

When we look at the short term, we find the business cycle primarily driven by fluctuations in consumer spending and business investment. The rate of expansion or contraction of an economy Over the business cycle can vary. Take For example, during the 2009-2020 expansion, the GDP grew at an average pace of about 2.3% per year, but the real GDP shrank at an annual rate of 5.0% in the first quarter of 2020 and then 31.4% in the second quarter, before growing at an the annual rate of 33.1% in the third quarter. Over longer periods we find that the volatility of the business cycle fades to reveal a particular pattern of growth in the economy. Potential Causes of the Business Cycle In general, the business cycle is governed by aggregate demand within the economy, but recessions

It can also be caused by sudden shocks to supply, which will impact both aggregate supply and aggregate demand.  The present recession that is going on is unusual in the fact that it displays elements of both demand and supply shocks. The forex trades of USD compared to other currencies at 500pips via Finance brokerage can be read here!

Let’s discuss these types of shocks in more detail.

Demand Shocks

Changes in consumer or business confidence can impact aggregate demand. If individuals believe the economy is likely to perform poorly in the future, people will be able to increase how much they save to prepare for lean times ahead. The associated decrease in spending would lower aggregate demand. Similarly, if businesses think that the economy is about to enter any type of recession, they are less likely to make any investments in new types of machinery or factories. This happens because consumers would not be able to afford their new products during their recession.

Currently, The COVID-19 public health crisis has given it’s contribution to the current recession in this manner. The uncertainty which is surrounding the virus and the state of the economy when combined with a high level of unemployment results in decreased consumption and increased saving on the part of consumers and their decreased willingness to increase any capital investment on the part of firms.

Supply Shocks

As part of a global economy, all events outside of the United States of America can impact aggregate demand inside the United

States, such as the 1979 oil shock that led to increased prices across the U.S. economy, which results in a recession. The current recession can also be said as an example of a supply shock; the need for social distancing has halted commerce significantly and it has created challenges in supply chains.


Ajay Deep

Ajay Deep is a young enthusiast who Loves Chandigarh and is always eager to make this beautiful city even more beautiful. A Mechanical Engineer By Chance and Working in an IT MNC by Choice. A Writer, Photographer and a Budding Entrepreneur. A Designer, Developer and Digital Marketing Expert. In brief : A Jack of All Trades and Master of Few :) You may reach Ajay Deep at
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