how do economists predict the boom and bust cycle 
economists watch a variety of economic metrics to anticipate future changes in economic activity in particular changes in the producer prices and durable goods production may act as leading indicators of business activity since companies are likely to reduce production when they expect a downturn another important metric is the monthly jobs report which reflects both employer sentiment and consumer buying power the bottom linethe boom and bust cycle is an informal term for the economic fluctuations between periods of prosperity and depression when the economic climate is favorable businesses are likely to see high profits resulting in higher spending and employment when businesses are less profitable the wider economy is likely to see higher prices and lower employment the effective prediction and moderation of boom and bust cycles has been a major focus of economists and policymakers 