Definition of Procyclic:
Directly related to the overall state of the economy. The value of a product, service or investment is procyclic if it moves up or down in correlation with the economy as a whole. For example, prices for consumer goods are generally procyclic. In good economic times, these prices typically rise. In poor economic times, they remain stagnant, and they may actually decline.
Procyclic describes a state where behavior and actions of a measurable product or service move in tandem with the cyclical condition of the economy.
Economic indicators can have one of three different relationships to the economy: procyclic, countercyclic (indicator and economy move in opposite directions), or acyclic (indicator has no relevance to the health of the economy).
How to use Procyclic in a sentence?
- Some examples of procyclic economic indicators are gross domestic product (GDP), labor, and marginal cost.
- Procyclic refers to a condition of a positive correlation between the value of a good, a service, or an economic indicator and the overall state of the economy.
- Policies and fiscal behavior typically fall into procyclic patterns in periods of boom and bust.
Meaning of Procyclic & Procyclic Definition