The business cycle, as defined in the modern day, is a primarily central bank-driven phenomenon. The central bank prints more money, electronic and otherwise, and injects more credit (the real definition of inflation) than is necessary. The volume of money fools investors into thinking that a rapid expansion is underway, which, in turn stimulates a "boom."
As the economy overheats, products and services that are an unnecessary outcome of the artificial boom become commonplace, leading to glut and, inevitably, to a collapse. During the boom, the central bank may artificially increase interest rates while also raising the amount of money available via credit and its printing plants. This inflation eases the economy (best case) into a "soft landing" – after which the cycle begins again.
The boom/bust cycle in a central-bank based economy is very destructive. It leads small entrepreneurs and the middle class to make fallacious investments. When the bust occurs, many are badly hurt. Savings evaporate. Houses are foreclosed upon. Sometimes, central banks can re-stimulate rapidly, but when the boom is too big and the shakeout too serious, then it can take years before the central bank can kick-start another artificial business cycle.
In a free market, the business cycle would be radically reduced because gold and silver, privately held or dug out of the ground, would respond to market forces. The volume of gold and silver in the economy would swell or diminish based on economic demands. There would be regional, but not national, and certainly not international, business cycles.
If the government and the monetary elite would agree to allow gold and silver coins to circulate next to fiat money of all kinds, the world would soon be back on the only kind of money standard that truthfully can be called "honest" – the free-market standard of gold and silver. People would soon discover the advantages of using a currency that stabilized – rather than perpetually destabilized – the economy.
Phase One of a business cycle is usually marked by political infighting, increased regulatory burdens, higher taxes and lower interest rates. The central bank "prints money" and stimulates bank lending via easy credit.
Phase Two of the business cycle is marked by economic expansion. Rates are comparatively low. Those closest to the credit spigot gain the most; politicians and bankers claim credit for the revival.
Phase Three is the "boom-time" of the business cycle – marked by enthusiastic expansion. There may be talk of a "new economy" and investment trends are seemingly enshrined as certainties. Price inflation rises, whether or not data reveals it.
Phase Four of the business cycle is the "bust phase" marked by inflation, slow growth or no growth and rapid collapse of asset classes that have risen too rapidly. "Animal spirits" are said to be deflated.
Cycles can last from only a few years to 20 years or longer.