Financial Glossary: Boom


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Boom

Boom

A period of time during which sales or business activity increases rapidly.

In the stock market, booms are associated with bull markets. Conversely, busts are associated with bear markets. The cyclical nature of the market and the economy in general suggests that every Bull market in history has been followed by a Bear market.

An economic boom is typically characterized by an increased level of economic output, a corresponding increase in aggregate demand, falling unemployment, and often, a rise in the Inflation rate. During busts, or recessions, aggregate demand is Low, Inflation decreases, unemployment rises and national income falls. In extreme recessions deflation (a sustained fall in the general price level) may occur. The causal relations between these indicators have been the subject of much debate from which ideas such as the NAIRU (non-accelerating Inflation rate of unemployment) have emerged

The internet technologies boom in the late '90s was one of the largest booms in history (followed by one of the biggest busts in history).

Posted by C5 Group Inc.

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