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Insurance Cycle is a term describing the tendency of the insurance industry to swing between profitable and unprofitable periods over time is commonly known as the underwriting or insurance cycle. The underwriting cycle is the tendency of property and casualty insurance premiums , profits , and availability of coverage to rise and fall with ...
Business cycles are a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion ...
Most business cycle theories focused on a single factor, [9] such as monetary policy or the impact of weather on the largely agricultural economies of the time. [8] Although business cycle theory was well established by the 1920s, work by theorists such as Dennis Robertson and Ralph Hawtrey had little impact on public policy. [11]
Prior to the late 1990s, macroeconomics was split between new Keynesian work on market imperfections demonstrated with small models and new classical work on real business cycle theory that used fully specified general equilibrium models and used changes in technology to explain fluctuations in economic output. [3]
An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes.
The American economist Milton Friedman developed the permanent income hypothesis in his 1957 book A Theory of the Consumption Function. [7] In his book, Friedman posits a theory that explained how and why future expectations change consumption. [8] Friedman's 1957 book A Theory of the Consumption Function created the basis for consumption ...
In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.
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.