Signs Which Indicate That an Economic Boom is Taking Shape

Several signs indicate that an economic boom is taking shape.

The first sign which indicates that an economic boom is taking shape is increase in employment opportunities. A sluggish economy doesn’t create employment opportunities. But a booming economy creates employment opportunities: given the fact that a boom creates demand for goods and services (as we shall see shortly). Now given the fact that the goods and services have to be produced by workers, it follows that a boom gives rise to employment opportunities. Indeed, publications like The Economist are able to identify which economies are booming and which economies are sluggish just by keeping track of the employment figures.

The second sign which indicates that an economic boom is taking shape is inflation. A booming economy translates into more money finding its way into circulation. So you have more money competing for the same products (goods and services), which ultimately leads to inflation. Conversely, a key indicator of a sluggish economy is deflation.

The third sign which indicates that an economic boom is taking shape is taking shape is increase in demand for products (goods and services). The explanation for this is in the fact that an economic boom translates into people having more money in their pockets. More money in people’s pockets in turn translates into people desiring to buy stuff they’d always wanted, but which they had been unable to buy before when the economy was sluggish.