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Since the mid-1800s, U.S. economic activity has fluctuated in cycles. From 1854 to 2009 there were 33 business cycles. In the 65 years between 1854 and 1919, there were 16 cycles. In the 64 years between 1945 and 2009 there were 11 business cycles.
Hence business cycles in the U.S. have become less frequent. The Bureau of Economic Analysis determines the official U.S. length of a cycle with its associated peaks and troughs.
The expansion phase of the business cycle lasts from the previous trough to the most recent peak. During the expansion phase, you would expect to see real GDP rise and strength in employment, consumption, personal income and industrial production. The average length of the expansionary phase has increased from 26.6 months (1854-1919) to the most recent 58.4 months (1945-2009). We are currently in an expansion phase, which began in June 2009 (nearly 87 months) but it has been the slowest expansion in history.
The contraction phase of the business cycle lasts from the previous peak to the most recent trough. During this phase real GDP will fall and will be associated with weakness in employment, consumption, personal income and industrial production. The average length of the contraction phase has fallen from 21.6 months (1854-1919) to the most recent 11.1 months (1945-2009). The last contraction was the "Great Recession," which lasted from December 2007 to June 2009.
Over time, the business cycle has become less frequent. Contractions have been shorter and expansions have been longer. The Federal Reserve deserves much of the credit. However, record cheap money by the Federal Reserve and other central banks since December 2009 might be the cause of the next "Great Contraction."
Life is filled with cycles of all types. The cycle begins when a person is born, receives training on the necessities of life, prepares for a career, enters the workforce, increases their salary from promotions, enters retirement and hopefully lives off their wealth from their more productive years.
But the world is also filled with less desirable cycles, cycles of poverty, of addictions, of divorce, of violence, of anxiety and fear, of oppression, of hate, of deep feelings of being unwanted and unloved, of illness, of loneliness, of oppression and of despair.
As ministers of the gospel, one of our primary missions is to break these negative cycles in people's lives. Jesus came to break these cycles. He has commissioned us to carry on His work. He has empowered us with His Word and His Spirit. He gave the ultimate sacrifice that we may be free and empowered us to lead others to this freedom. Jesus announced His purpose in Nazareth when he quoted from Isaiah 61:1-2a.
"The Spirit of the Lord is upon Me, because He has anointed Me to preach the gospel to the poor; He has sent Me to heal the brokenhearted, to preach deliverance to the captives and recovery of sight to the blind, to set at liberty those who are oppressed; to preach the acceptable year of the Lord" (Luke 4:18-19).
Although the mission of Jesus was initially to the Jews, after His sacrifice and resurrection, the benefits of the gospel were later extended to the gentiles. Some of the benefits from breaking free of these negative cycles are expounded upon throughout Isaiah 61: the oil of joy for morning, the garment of praise for heaviness, they shall eat the riches of the nations, they receive a double honor instead of shame, rejoicing over their portion instead of humiliation, they have a double portion, they are clothed with the garments of salvation and covered with the robe of righteousness (Is. 61:3-11).
To free humanity from these negative cycles, we must turn people to the Good News of Jesus. Do we have the will? We will need to operate in love and the power of the Holy Spirit. We must have a personal relationship with the Master to be able to lead others to the source of all freedom.
Dr. James Russell is a professor of economics and undergraduate chair of the College of Business at Oral Roberts University.
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