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Abstract

It has been empirically proven that the business cycle dating model is inextricably linked with defining the boundaries of periods of stable and instable economic development. The author compares the methods of dating US economic cycles in accordance with the model of the National Bureau of Economic Research (NBER) and the proposed in this article CMI model of cycles. Shown certain competitive advantages of dating СМІ cycles based on the CMI model against the NBER model, in which case there may be periods of ambiguity in dating. The article demonstrates that the use of the author's СМІ model for dating business cycles avoids the ambiguities that arise in the official dating of recessions based on the classic US NBER model of cycles. The dating of US business cycles with the CMI model revealed a cumulative effect of reducing unemployment, which explains that even with relatively small economic growth, which, however, lasts for a sufficiently long period of time, a significant overall reduction in the unemployment rate can be achieved. The equation to determine the cumulative market imperfections first index (∆Р) reflects the current balance between inflation, employment and economic growth for each moment of real (calendar) time and defines fundamental trends, which can be enhanced (weakened) by random events (external shocks, government actions, speculators, etc.). Therefore, despite the single driving force behind economic cycles, which is quantified by magnitude (∆Р), the configuration of each real cycle is unique. It is shown that the CMI model of economic cycle provides tools to achieve synergies from different types of regulation to maximize economic growth and employment at acceptable inflation by increasing the length of the stability period while reducing the magnitude of cumulative market failure.