Business, investing and life in general follow predictable ebbs and flows. The Business Cycle is no exception. This is the cycle whereby the economy goes through strong growth periods, weaker growth periods and everything in between.
Governments and the Central Banks try to manage this cycle and prevent any enduring excesses from building up, while guiding the economy along a sustainable path of growth.
When an economy starts growing too quickly, the Central Bank will move to "take away the punch bowl” (official economics lingo) and cool the...