What do you mean by procyclical and countercyclical?

Pro-cyclical means that when the economic environment is good, the performance of an industry is also better, and it fluctuates with the ups and downs of the economic cycle; Counter-cyclical means that when the economic environment is bad, some industries can rise against the trend. There are still some industries, no matter whether the economic environment is rising or falling, whether it is booming or declining, Taishan is unmoved. It goes up when it should go up, and it goes down when it should go down, each with its own rhythm and no cycle.

If the economy is in a boom period, social investment and consumption will show optimistic expectations, and production and sales of various industries will be more active. On the contrary, when the economy is in recession, social investment and consumption will have expectations of joys and sorrows, and everyone will tighten their wallets and the market will be depressed. This can be understood as a procyclical behavior, which helps the ups and downs.

Of course, if the economy continues to prosper and overheat, there will inevitably be a series of problems such as inflation and asset price bubbles. At this time, the government will introduce policies to stabilize the economy, such as raising interest rates and raising the reserve ratio of commercial banks. On the contrary, if the economy continues to decline and slump, there will be a series of social problems, such as bankruptcy of enterprises and rising unemployment rate. At this time, the government will also introduce policies to stabilize the economy and stimulate economic growth by cutting interest rates and taxes and reducing the reserve ratio of commercial banks. In order to curb the bubble in the boom period, tight fiscal policy and monetary policy are adopted, and loose monetary policy and active fiscal policy are implemented in the depression period, which is counter-cyclical regulation.