Prosperity, according to Shpitgof, begins when new inventions open new opportunities for investments into fixed capital. In order that businessmen made large investments, motivation is required, and without it production of fixed capital in wide scales will not take place. Large innovations involve creations of the new enterprises and the new equipment. Prosperity does not arise only as result of inventions or opening. It is result of practical expansion of innovations which are a driving force of the period of prosperity.
All cycles in reality are not similar at each other, everyone has the specific features,. Thus each crisis arises as if unexpectedly and is caused by any absolutely exclusive. In the period between crises, as well as in the sea in a clear weather, disorders, "lambs" in the form of partial, small and intermediate recessions that gave the grounds to speak about different types of economic crises are possible.
On graphics on a horizontal axis time (t), down — output (Q) is postponed. The increasing direct OA testifies to continuous economic growth and development of market economy in general.
The economic crisis finds not only a limit, but also an impulse in development of economy, carrying out the stimulating ("") function. During crisis there are motives to reduction of costs of production, increase in profit, updating of the capital on a new technical basis. With crisis the previous period of development comes to an end and the following begins. Crisis — the most important element of the mechanism of a of market system of economy.
The history of development of human society visually that the market economy is capable to create bigger quantity of goods and services for bigger number of people, than any other economic system. Also it is explained by that in the conditions of market economy the high motivation to creative activity is provided, to progress, people make the choice, than to be engaged. Thus arises high risk and responsibility in economic activity that develops an initiative, enterprise and conducts to high of development of a social production.
Eras of the increased economic activity represent the periods throughout which development of technology and opening of new resources create a favorable basis for growth, and, first of all, for growth of investments. During such periods technical progress it is much more accelerated in comparison with that it would be possible to expect at usual action of numerous inventions, each of which has rather small value. During the long periods of expansion becomes effective new, it is possible to tell revolutionary equipment which deeply changes character of all economy. This equipment, creates a basis for huge increase in mass of the capital benefits and growth of investments.
Recession is followed by the period of a depression (stagnation) which by a stagnant condition of market economy, demand for consumer goods and services, considerable loading of the enterprises, mass unemployment, decrease the population lives. Here pertinently to remember an old : "When the neighbor loses work, it is recession and if you lose work, it is a depression!" During this period there is an adaptation of economy to new conditions and requirements of economy.
The boom is the phenomenon caused by the movements of the businessmen directing to new opportunities. The boom can amplify is exaggerated by optimistic expectations. The essence of boom can be reduced to introduction in a production system an innovation.
Refer distribution of, labor and financial resources of the country which to be organized to factors of distribution so that more to promote economic growth (to production gain, an of its quality and improvement of productions.
Continuous economic growth in market economy a number of essential shortcomings (inflation, unemployment, etc.), including recurrence. The matter is that development of a market happens wavy, or is cyclic.
or having determined growth of GNP per capita. But such calculation does not give a complete idea of the growth of the country, because economic growth — this not only quantitative change of output, but also a of a product and factors of production.