PeakThe high point, where an expansion ends and a contraction begins.
TroughThe low point, where a contraction ends and an expansion begins.
ExpansionThe climb from a trough to the next peak. Economic activity is increasing.
Contraction (recession)The fall from a peak to the next trough. Economic activity is decreasing.
The cycle and the axes 3
One cycle (peak to peak)One whole business cycle, measured from one peak to the next.
Real GDPTotal output adjusted for inflation, the widest gauge of economic activity.
TimeThe level axis. Real-data charts mark it in quarters or years.
How this list was compiled: Every name checked on 2026-09-30 in at least two of these. (1) Congressional Research Service, In Focus IF10411, Introduction to U.S. Economy: The Business Cycle and Growth (a US government work), read in the copy at https://www.everycrsreport.com/reports/IF10411.html (the business cycle's four phases: expansion, peak, contraction and trough; real GDP, total output after inflation adjustment, is the widest gauge of economic activity; a single cycle is dated peak to peak, or trough to trough; the economy does not show a regular, smooth cycle as the stylized figure does). (2) National Bureau of Economic Research, Business Cycle Dating and US Business Cycle Expansions and Contractions, https://www.nber.org/research/business-cycle-dating and https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions (an expansion spans trough to peak; recessions, contractions in economic activity, run from a peak to a trough; the economy is normally in expansion and most recessions are brief; cycles measured peak from previous peak). (3) Federal Reserve Bank of San Francisco, What are business cycles and how do they affect the economy? (2002), https://www.frbsf.org/research-and-insights/publications/doctor-econ/2002/05/business-cycles-economy/ (expansion and recession; trough and peak; charts shade the recessions; real GDP). (4) Wikipedia, Business cycle, https://en.wikipedia.org/wiki/Business_cycle (expansion, recession, contraction, peak, trough; real GDP over time). Licence: own work
The drawing: Drawn for this site on 2026-09-30 from plain geometry. Own original chart of a made-up curve; nothing is traced or copied. Licence: own work
How it works
To draw and label the business cycle, name four phases on one curve: expansion, peak, contraction and trough. This chart adds the span of one full cycle and the names of its two axes.
Read the full guide
Read the curve from left to right
The curve shows real GDP over time. While it climbs, the economy is expanding. The top of the climb is a peak. The fall that follows is a contraction, also called a recession, and it ends at a trough. Then the next expansion starts.
Draw it by hand
Draw an upright axis for real GDP and a level axis for time. Sketch a wave that ends higher than it starts. Mark one high point and the next low point, then label the rise and the fall between them.
Real cycles are not this even. Expansions usually last much longer than contractions, and no two are the same size.
Questions and answers
What are the four phases of the business cycle?
Expansion, peak, contraction and trough. Activity grows in an expansion, tops out at the peak, shrinks in a contraction and bottoms out at the trough.
Is a contraction the same as a recession?
On this chart, yes. The National Bureau of Economic Research calls the period from a peak to the next trough a recession and describes recessions as contractions in economic activity.
How long is one business cycle?
It varies. A cycle is measured from one peak to the next, or from one trough to the next, and no two cycles are the same length.
What does the upright axis of a business cycle graph show?
Economic activity, usually real GDP: the total output of the economy adjusted for inflation. The level axis shows time.