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Analyze business cycle phases (expansion, peak, contraction, trough) and their implications for business strategy and policy response. Use this skill when the user needs to identify the current economic phase, anticipate cyclical turning points, or adapt business strategy to macroeconomic cycles — even if they say 'are we heading into a recession', 'how should we prepare for a downturn', or 'when will the economy recover'.
npx skill4agent add asgard-ai-platform/skills econ-business-cycleIRON LAW: Cycles Are Inevitable, Timing Is Not Predictable
Business cycles WILL happen — no economy grows forever. But predicting
EXACTLY when a peak or trough occurs is unreliable. Focus on identifying
the CURRENT phase and preparing for the NEXT one, not predicting exact
turning points.| Phase | Characteristics | Key Indicators |
|---|---|---|
| Expansion | Rising GDP, falling unemployment, growing profits, rising asset prices | PMI > 50, yield curve normal, consumer confidence rising |
| Peak | Economy at maximum output, inflation accelerating, capacity constraints | PMI declining from highs, inflation above target, central bank tightening |
| Contraction | Falling GDP, rising unemployment, declining profits, credit tightening | PMI < 50, yield curve may invert, layoffs increasing |
| Trough | Economy at minimum, excess capacity, low inflation, maximum pessimism | PMI stabilizing, central bank easing, inventories depleted |
| Phase | Business Strategy | Financial Strategy |
|---|---|---|
| Expansion | Invest in capacity, hire, launch new products | Lock in fixed-rate debt, build reserves |
| Peak | Reduce inventory, tighten credit terms, prepare cost cuts | Reduce leverage, increase cash position |
| Contraction | Cut costs, preserve cash, acquire distressed assets | Extend debt maturities, negotiate with creditors |
| Trough | Invest counter-cyclically, acquire talent at lower cost | Deploy cash reserves, buy undervalued assets |
| Indicator | Signal |
|---|---|
| Inverted yield curve | 10Y-2Y Treasury spread negative → recession in 12-18 months (historically ~80% accurate) |
| Sahm Rule | Unemployment 3-month average rises 0.5%+ from 12-month low |
| 2 consecutive quarters negative GDP | Technical recession (lagging confirmation) |
| Conference Board Leading Index | 6+ months of decline |
# Business Cycle Assessment: {Country/Region}
## Current Phase: {Expansion / Peak / Contraction / Trough}
## Evidence
| Category | Indicator | Reading | Signal |
|----------|-----------|---------|--------|
| Leading | PMI | XX | {interpretation} |
| Leading | Yield curve | XX bps | {interpretation} |
| Coincident | Industrial production | X% YoY | {interpretation} |
| Lagging | Unemployment | X% | {interpretation} |
## Phase Progression
{Where we are in the cycle and directional signals}
## Strategic Implications
| Domain | Recommendation |
|--------|---------------|
| Investment | {expand/hold/cut} |
| Hiring | {hire/freeze/reduce} |
| Inventory | {build/maintain/liquidate} |
| Pricing | {raise/hold/discount} |
| Cash management | {deploy/conserve} |references/taiwan-cycles.md