Economic fluctuation is the term provided with reference to the business cycle or the economic cycle. It concentrates on the aggregate behaviour of output, employment, and prices with focus on the economy as a whole over a long period of time.
The activities of the nations are dependent on the fluctuation of the economic cycle which consists of aggregate economic activity. The cycle is the process which includes the economic activities like the recessions and the boom, which could vary among different nations. These activities are assumed by the economists to be the outcomes of the factors such as the government policies, and they are solely held responsible for the irregular fluctuations by the essential attributes of the market. As the trading between the nations all over the world has developed with a massive rate, so the fluctuation in the economic cycle of one nation has its effects on the other nations as well. (Krugman & Wells, 2009)
United States of America has become the central hub for trading for the whole world due to its huge economy. For which a drop in US GDP has the ability to cause a visible damage in various economies world wide, at various levels simultaneously. And that would be the result of the various economic activities conducted among the US and other countries. The activities include exports, imports, investments, and the result of the recession in US can be observed in stock markets, unemployment rates, etc. (Krugman & Wells, 2009)
It can be deduced that an economic fluctuations in an economy could result in a change in the economic cycle of another nation. And a change in the largest economy of the world could result in a change in other economies around the globe.
Reference
Krugman, P., & Wells, R. (2009). Macroeconomics. Worth Publishers.
