How did business cycles change after World War II?

After World War II, economic cycles displayed a distinct transformation characterized by shorter recessions and lengthier periods of expansion. Several factors contributed to this change.

One significant factor was the post-war economic environment, which saw increased consumer spending, higher levels of employment due to a booming industrial sector, and government policies that stimulated economic growth. The Keynesian economic policies adopted during this time emphasized fiscal and monetary measures to maintain full employment and stabilize the economy.

Moreover, the global economy began to experience more integrated trade patterns and technological advancements, which further facilitated prolonged economic expansion. This integration allowed economies to become more resilient, reducing the frequency and duration of downturns.

The trend of shorter recessions and extended expansions fundamentally altered the landscape of business cycles, as economic stability became a pivotal focus for policymakers and economists alike. The combination of these post-war developments created an era where expansions were not only longer but also more robust in terms of sustained growth, leading to this significant shift in the nature of business cycles after the war.