Authors and guest blog by Davaajargal Luvsannyam and Khuslen Batmunkh
Dating of business cycle is a very crucial for policy makers and businesses. Business cycle is the upward and downward trend of the production or business. Especially macro business cycle, which represents the general economic prospects, plays important role for policy and management decisions. For instance, when the economy is in downtrend companies tend to act more conservative. In contrast, when the economy is in uptrend companies tend to act more aggressive with the purpose of enhancing their market share. Keynesian business cycle theory suggests that business cycle is an important indicator for monetary policy which is able to stabilize the fluctuations of the economy. Therefore accurate dating of business cycle can be fundamental to efficient and practical policy decisions.
