Two forms of general economic change have long been accepted by most economists as systematic features of industrialized economies organized under capitalist institutions. One is persistent long-term growth; the other is the business cycle.

Both are generalizations of apparently irregular behavior. Total output rarely rises or falls at the same rate for two consecutive months, and it seldom moves in the same direction for many months together. These irregular movements, however, are not without pattern. The month-to-month movements are, for periods of time, predominantly upward, and these periods of expansion are succeeded by other periods in which movements are predominantly downward. These are the business cycles of capitalist economic life. They are fluctuations of aggregate output in which other aspects of economic activity join; they are widely diffused through the many sectors of the economy; and they recur at intervals which are as long as ten to twelve years but are normally less than five or six. And when we consider periods longer than those of business cycles, there emerges a persistent underlying tendency for output to rise. Although the rate of growth is not constant, the average level of output during any business-cycle period is normally higher than that attained during the preceding cycle period. The persistence of growth is one characteristic of the primary secular trend of output in capitalist countries in the era of industrialization.

The existence of business cycles and of irreversible primary trends is supported by considerable bodies of evidence.