What are leading and lagging indicators in business cycle analysis?

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Business cycles are the fluctuations in economic activity that occur over time. They are characterized by four phases: expansion, peak, contraction, and trough. Understanding the business cycle is important for investors, managers, and policymakers, as it affects their decisions and strategies. One way to analyze the business cycle is to use leading and lagging indicators. These are variables that change before or after the changes in the economy. In this article, you will learn what are leading and lagging indicators, how they differ, and how to use them in business cycle analysis.

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