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Procyclical and countercyclical variables are variables that fluctuate in a way that is positively or negatively correlated with business cycle fluctuations in gross domestic product (GDP). The scope of the concept may differ between the context of macroeconomic theory and that of economic policy –making.
Vice versa, a countercyclical variable has a negative correlation. An acyclical variable with a correlation close to zero implies no systematic relationship to the business cycle. We find that productivity is slightly procyclical, which suggests workers and capital are more productive when the economy is experiencing a boom.
The wage share (arguably) as countercyclical, but also as a lagging indicator with respect to the employment rate as procyclical indicator in the US Procyclical indicators move in the same direction as the general economy: they increase when the economy is doing well; decrease when it is doing badly. Gross domestic product (GDP) is a procyclic ...
Procyclical and countercyclical are terms used to describe how an economic quantity is related to economic fluctuations. Topics referred to by the same term This disambiguation page lists articles associated with the title Procyclic .
Import expenditures are commonly considered to be procyclical and cyclical in nature, coincident with the business cycle. [54] Domestic export expenditures give a good indication of foreign business cycles as foreign import expenditures are coincident with the foreign business cycle.
By the 1980s new Keynesian economists became dissatisfied with these early nominal wage contract models [142] since they predicted that real wages would be countercyclical (real wages would rise when the economy fell), while empirical evidence showed that real wages tended to be independent of economic cycles or even slightly procyclical. [143]
Current Expected Credit Losses (CECL) is a credit loss accounting standard (model) that was issued by the Financial Accounting Standards Board on June 16, 2016. [1] CECL replaced the previous Allowance for Loan and Lease Losses (ALLL) accounting standard.
Leverage is defined as the ratio of the asset value to the cash needed to purchase it. The leverage cycle can be defined as the procyclical expansion and contraction of leverage over the course of the business cycle.