What is a counter cyclical investment?

Counter-cyclical meansmoving against the economic (or business or market) cycle. For example, counter-cyclical business will make higher profits when the economy slows, and a counter-cyclical investment will rise when markets fall.

What is an example of a counter cyclical business?

For example, counter-cyclical business will make higher profits when the economy slows, and a counter-cyclical investment will rise when markets fall. It is not difficult to think of examples of counter-cyclical businesses (accountants and lawyers specialising in insolvency and bankruptcy are an obvious example) but they are small and specialised.

What are procyclical and countercyclical variables?

Procyclical and countercyclical variables are variables that fluctuate in a way that is positively or negatively correlated with business cycle fluctuations in gross domestic product (GDP). The scope of the concept may differ between the context of macroeconomic theory and that of economic policy –making.

What are countercyclical policies?

That is, countercyclical policies are ones that cool down the economy when it is in an upswing, and stimulate the economy when it is in a downturn. Keynesian economics advocates the use of automatic and discretionary countercyclical policies to lessen the impact of the business cycle.