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business cycles.tex
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\documentclass{scrartcl}
\usepackage{amssymb}
\usepackage{amsmath}
\usepackage{tikz}
\usetikzlibrary{decorations.pathreplacing} %for brackets (fig. 1)
\usetikzlibrary{calc} %for centerarc (fig. 2)
%Kwan, C. (2013). ``Business Cycle in China since the Lehman Crisis: Interaction among Macroeconomic Policy, Economic Growth and Inflation.'' China & World Economy 21(5), pp. 1-19 -- fig. 4 \& 5
\def\centerarc[#1](#2)(#3:#4:#5)% Syntax: [draw options] (center) (initial angle:final angle:radius)
{ \draw[#1] ($(#2)+({#5*cos(#3)},{#5*sin(#3)})$) arc (#3:#4:#5); }
\begin{document}
\begin{figure}
\centering
\vspace*{-0.5in} %just for spacing; otherwise, goes to middle of page
\begin{tikzpicture}
%axis
\fill[blue!10!white] (2.5,0) rectangle (5,4); %middle shading
\draw[->,>=latex,semithick] (0,0)--(0,4); %y-axis
\draw[->,>=latex,semithick] (0,0)--(7.5,0); %x-axis
\node at (-.85,4.4) {{\scriptsize (a)}};
\node at (0,4.55) {{\scriptsize Rate of}};
\node at (0,4.25) {{\scriptsize change}};
\node at (7.65,0) {{\small $t$}};
%lines
\draw[semithick] (0,2)--(7.5,2); %benchmark
\draw[densely dashed] (2.5,0)--(2.5,4); %boom #1 | bust
\draw[densely dashed] (5,0)--(5,4); %bust | boom #2
%business cycles
\draw[thick] (0,2) sin (1.25,3.35) cos (2.5,2) sin (3.75,0.65) cos (5,2) sin (6.25,3.35) cos (7.5,2); %g
\draw[thick,gray](0,1.8) sin (1.25,3.15) cos (2.5,1.8) sin (3.75,0.55) cos (5,1.8) sin (6.25,3.15) cos (7.5,1.8); %i
\node at (0.25,2.80) {{\scriptsize $g_t$}};
\node at (0.25,1.75) {{\scriptsize $i_t$}};
%labels
\node at (1.25,2.25) {{\scriptsize Boom}};
\node at (3.75,2.25) {{\scriptsize Bust}};
\node at (6.25,2.25) {{\scriptsize Boom}};
\node at (8.2,2.15) {{\scriptsize Average}};
\node at (8.35,1.85) {{\tiny (benchmark)}};
%\draw[help lines] (0,0) grid (6,4);
\end{tikzpicture}
%\vspace{0.25cm}
\begin{tikzpicture}
%shading
\fill[blue!10!white] (0,0) rectangle (1.25,4); %start period
\fill[blue!10!white] (2.5,0) rectangle (3.75,4); %recovery
\fill[blue!10!white] (5,0) rectangle (6.25,4); %stagflation
%axis
\draw[->,>=latex,semithick] (0,0)--(0,4); %y-axis
\draw[->,>=latex,semithick] (0,0)--(7.5,0); %x-axis
\node at (-.85,4.4) {{\scriptsize (b)}};
\node at (0,4.55) {{\scriptsize Rate of}};
\node at (0,4.25) {{\scriptsize change}};
\node at (7.65,0) {{\small $t$}};
\node at (8.2,2.15) {{\scriptsize Average}};
\node at (8.35,1.85){{\tiny (benchmark)}};
%lines
\draw[semithick] (0,2)--(7.5,2); %benchmark
\draw[densely dashed] (1.25,0)--(1.25,4); %start | recession
\draw[densely dashed] (2.5,0)--(2.5,4); %recession | recovery
\draw[densely dashed] (3.75,0)--(3.75,4); %recovery | overheating
\draw[densely dashed] (5,0)--(5,4); %overheating | stagflation
\draw[densely dashed] (6.25,0)--(6.25,4); %stagflation | end
%business cycles
\draw[thick] (0,2) sin (1.25,0.65) cos (2.5,2) sin (3.75,3.35) cos (5,2) sin (6.25,0.65) cos (7.5,2); %g
\draw[thick,gray] (0,3.35)cos(1.25,2)sin(2.5,0.65) cos (3.75,2) sin (5,3.35) cos (6.25,2) sin (7.5,0.65); %i
\node at (0.25,3.5) {{\scriptsize $i_t$}};
\node at (0.25,1.25) {{\scriptsize $g_t$}};
%lower labels
\draw[decorate,decoration={brace,amplitude=3pt},yshift=-4pt,semithick] (2.45,0)--(1.3,0);
\draw[decorate,decoration={brace,amplitude=3pt},yshift=-4pt,semithick] (3.7,0)--(2.55,0);
\draw[decorate,decoration={brace,amplitude=3pt},yshift=-4pt,semithick] (4.95,0)--(3.8,0);
\draw[decorate,decoration={brace,amplitude=3pt},yshift=-4pt,semithick] (6.2,0)--(5.05,0);
%
\node at (1.875,-.68) {\tiny Recession}; \node at (1.875,-.45) {\tiny (1)};
\node at (3.100,-.7) {\tiny Recovery}; \node at (3.125,-.45) {\tiny (2)};
\node at (4.375,-.7) {\tiny Overheating}; \node at (4.375,-.45) {\tiny (3)};
\node at (5.75,-.7) {\tiny Stagflation}; \node at (5.625,-.45) {\tiny (4)};
%
\node at (1.875,-1) {\tiny Low $g_t$}; \node at (1.875,-1.25) {\tiny Low $i_t$};
\node at (3.125,-1) {\tiny High $g_t$}; \node at (3.125,-1.25) {\tiny Low $i_t$};
\node at (4.4,-1) {\tiny High $g_t$}; \node at (4.4,-1.25) {\tiny High $i_t$};
\node at (5.75,-1) {\tiny Low $g_t$}; \node at (5.75,-1.25) {\tiny High $i_t$};
%\draw[help lines] (0,0) grid (6,4);
\end{tikzpicture}
\caption{Business cycle phases: (a) without time lags; (b) with time lags}
\end{figure}
\begin{figure}
\centering
\vspace{1cm} %just for spacing
\begin{tikzpicture}
%axis
\draw[->,>=latex,semithick] (0,0)--(0,6.5); %y-axis
\draw[->,>=latex,semithick] (0,0)--(6.5,0); %x-axis
\draw[semithick] (0,3.25)--(6.5,3.25); %horizontal benchmark
\draw[semithick] (3.25,0)--(3.25,6.5); %vertical benchmark
\node at (6.75,0) {{\small $g_t$}};
\node at (0,6.75) {{\small $i_t$}};
%quadrant labels
\node at (1,0.55) {\scriptsize Recession}; \node at (1,0.85) {\scriptsize (1)};
\node at (5.5,0.5) {\scriptsize Recovery}; \node at (5.5,0.85) {\scriptsize (2)};
\node at (5.5,5.75) {\scriptsize Overheating}; \node at (5.5,6.1) {\scriptsize (3)};
\node at (1,5.75) {\scriptsize Stagflation}; \node at (1,6.1) {\scriptsize (4)};
%labels in circle
\node at (2.15,4.6) {\scriptsize Inflation rate};
\node at (2.15,4.32){\scriptsize turns downward};
\node at (2.15,4.0) {\scriptsize following a};
\node at (2.15,3.7) {\scriptsize decrease in $g_t$};
%
\node at (2.15,2.8) {\scriptsize Growth rate};
\node at (2.15,2.5) {\scriptsize turns upward};
\node at (2.15,2.2) {\scriptsize following};
\node at (2.15,1.9) {\scriptsize monetary};
\node at (2.15,1.6) {\scriptsize easing};
%
\node at (4.35,4.70) {\scriptsize Growth rate};
\node at (4.35,4.44) {\scriptsize turns downward};
\node at (4.35,4.12) {\scriptsize following};
\node at (4.35,3.82) {\scriptsize monetary};
\node at (4.35,3.52) {\scriptsize tightening};
%
\node at (4.35,2.8) {\scriptsize Inflation rate};
\node at (4.35,2.5) {\scriptsize turns upward};
\node at (4.35,2.2) {\scriptsize following an};
\node at (4.35,1.9) {\scriptsize increase in $g_t$};
%circular arrows
%\draw[ultra thick,red] (3.25,3.25) circle (2.5cm);
\centerarc[->,>=stealth,very thick](3.25,3.25)(45:134.5:2.5)
\centerarc[->,>=stealth,very thick](3.25,3.25)(135:224.5:2.5)
\centerarc[->,>=stealth,very thick](3.25,3.25)(225:314.5:2.5)
\centerarc[->,>=stealth,very thick](3.25,3.25)(-45:44.5:2.5)
%labels
\node at (3.25,6.70) {\tiny Benchmark}; %top
\node at (7.25,3.25) {\tiny Benchmark}; %side
\node at (-.3,3.25) {\rotatebox{90}{\scriptsize{Inflation rate}}};
\node at (3.25,-.3) {\scriptsize{Economic growth rate}};
%arrows between quadrants
\draw[white,line width=4] (4,6.07)--(2.5,6.07); %manual fill
\node at (3.3,6.07) {{\tiny decreasing $g_t$}}; %top
\draw[->,>=stealth] (4,6.25)--(2.5,6.25);
%
\draw[white,line width=4] (2.5,0.4)--(4,0.4); %manual fill
\node at (3.25,0.4) {{\tiny increasing $g_t$}}; %bottom
\draw[->,>=stealth] (2.5,0.25)--(4,0.25);
%
\draw[white,line width=4] (6.1,2.5)--(6.1,4); %manual fill
\node at (6.1,3.15) {\rotatebox{270}{\tiny increasing $i_t$}}; %right
\draw[->,>=stealth] (6.25,2.5)--(6.25,4);
%
\draw[white,line width=4] (0.4,4)--(0.4,2.5); %manual fill
\node at (0.4,3.3) {\rotatebox{90}{\tiny decreasing $i_t$}}; %left
\draw[->,>=stealth] (0.25,4)--(0.25,2.5);
\end{tikzpicture}
\caption{Business cycles: interaction between growth \& inflation}
\end{figure}
\end{document}