Practical Time Series Analysis

Cyclical changes

Cyclical changes are movements observed after every few units of time, but they occur less frequently than seasonal fluctuations. Unlike seasonality, cyclical changes might not have a fixed period of variations. Besides, the average periodicity for cyclical changes would be larger (most commonly in years), whereas seasonal variations are observed within the same year and corresponds to annual divisions of time such as seasons, quarters, and periods of festivity and holidays and so on.

A long run plot of the time series is required to identify cyclical changes that can occur, for example, every few years and manifests as repetitive crests and troughs. In this regard, time series related to economics and business often show ...