Low interest rates and radical new technologies contribute to muting an otherwise active economic cycle. And yet, underlying boom-to-bust business cycles remain and impact us.
Watch this short video to learn more about the Business Cycle Challenge and what it means for Wichita.
'A TENSION BETWEEN BOOM AND BUST'
Embracing this new normal.
Abnormally low interest rates and radical new technologies contribute to muting an otherwise active economic cycle. And yet, underlying boom-to-bust business drivers remain.
Economic conditions naturally ebb and flow, giving us periods of expansion and contraction. Dr. Jay Price, an economic history professor at Wichita State University, compares these cycles to the ocean. They are neither good, nor bad, but are immensely important. And just like the ocean, these cycles can be navigated to new successes, or they can push a city to stagnation. It's all in how that city adjusts to changing conditions.
"Sometimes the wind is right behind you and it pushes you along," Price says. "Sometimes, you have to take to the wind. It's a constant monitoring of the situation."
The example most relevant to Wichita can be found in aviation manufacturing. This sector has been Wichita's backbone for generations, and continues to be a powerful economic driver for the city. But it is not immune to booms and busts.
It's about making some really hard decisions and saying we are going to be a different city. ... And that's OK.Jay Price
When these busts happen, a whole network of aviation-related companies can be affected — from the manufacturers themselves to the contractors and subcontractors making things like electronics and airplane seats.
In one sense, one of our biggest advantages is we can be flexible. We have that opportunity to remake ourselves.
These are all important businesses, providing good-paying jobs and value for the city. But increasing diversity in Wichita's economy can help by providing a steadier business cycle overall. Sectors like health care often run counter-cyclical, meaning they can provide just as much value in a recession as they can during recovery.
"Situations that allowed one set of businesses or entrepreneurs to flourish might shift so that those same sets of entrepreneurs have to change," Price says. "In one sense, one of our biggest advantages is we can be flexible. We have that opportunity to remake ourselves."