A contraction is the phase of the business cycle when the economy declines, often with falling real GDP and rising unemployment, moving from peak toward trough (expansion, peak, contraction, trough).

Mary Hall is a editor for Investopedia's Advisor Insights, in addition to being the editor of several books and doctoral papers. Mary received her bachelor's in English from Kent State University with ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Erika Rasure is globally-recognized as a ...

Why does economic growth matter? The answer for economists is that it measures an important component of social progress—namely, economic welfare, or how much benefit members of society get from the ...