Peak
Topic: Economic Growth Theories and Business Cycles · NCERT: Beyond NCERT
Meaning
The peak is the highest point of a business cycle. It is where expansion ends. After the peak, economic activity starts to fall and the contraction phase begins. Around the peak, output, jobs and prices are usually at their highest for that cycle.
Example
US economic activity peaked in 1929, when unemployment was about 3%. After the Wall Street crash in October 1929, the economy fell into the Great Depression. Unemployment reached 25% by 1933.
Don't confuse with
- Trough: the trough is the lowest point of the cycle. It ends a contraction, while the peak ends an expansion.
Related concepts
- Business cycle
- Expansion
- Overheating
- Goldilocks economy
- Trough
- Recovery
- Soft landing
- Economic slowdown
- Growth recession
- Recession