The scrolling ribbon is real GDP plotted over time, riding on a rising long-run trend. Around that trend, output oscillates through the four textbook phases of a business cycle: expansion (output climbing above trend), peak (growth stalls, output at its cyclical high), recession (output falling below trend), and trough (contraction bottoms out before the next expansion begins). The small orbiting marker on the ring at the right traces the same cycle in phase space — output gap on one axis, its rate of change on the other — so you can see the economy's current position in the loop at a glance.
d(gap)/dt = velocity
d(velocity)/dt = -ω²·gap − damping·velocity + shock
GDP = trend·t + amplitude·gap
unemployment ≈ 5% − 2·gap (Okun's law)
inflation ≈ 2% + 3·gap (Phillips curve)
- Cycle volatility — how large the swings around trend are; a hotter, less-diversified economy swings harder.
- Cycle length — how quickly the economy rotates through all four phases; shorter means sharper, more frequent cycles.
- Stabilization policy — fiscal and monetary counter-cyclical response (automatic stabilizers, central-bank rate moves); higher values damp the oscillation toward a smoother path.
- Trend growth — the underlying long-run growth rate the cycle oscillates around, driven by productivity and labor-force growth.
- Shock buttons — inject a one-off demand shock (a credit crunch or a stimulus/export boom) to see how the cycle absorbs and recovers from it.
Real-world relevance: this is why central banks watch the output gap, not just GDP growth — a positive gap warns of overheating and rising inflation, a negative gap warns of slack and rising unemployment, and stabilization policy exists to shrink the amplitude of the ride, not to eliminate the cycle entirely.