Credit and Business Cycles are interrelated concepts. The credit theories play a major role in analyzing the business cycles of the companies operating in the global market. There are various factors that are important in the context of analysis of business cycles using the notion of credit. Connection of Credit and Business Cycles It is normally assumed that credit and business cycles are related concepts. It is assumed that the theory and concepts of credit can be employed in order to analyze business cycles that are the inconsistencies in the financial activities of a company. In the context of the modern financial world this could be called an important procedure.Important Considerations of Credit and Business CyclesThere are a whole lot of factors and considerations that come into play when the irregularities in the financial activities of an entity are being judged. These play an important role in this context. There are different approaches that emphasize on specific points. However, the core concerns in this situation may be mentioned as below:
The degree to which a credit market changes its capacity of buying from the agents that are non productive to the agents that are productive. This is measured on the basis of every date and in the context of difficulty of using the credit agreements.
The result of a little, impermanent and unexpected blow on the allocation of financial resources and sum of productiveness as well as its role in the generation of significant and consistent impact on the worth of the properties and the total production.
The relation of the allocation of financial resources between the generative and non-generative agents and other factors like the sum of productiveness, the worth of assets for a certain period of time and the output.
Last Updated on : 9th July 2013