Fox-Trot Economy - Explained
What is a Fox Trot Economy?
Written by Jason Gordon
Updated at March 28th, 2023
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
What is a Fox-Trot Economy?
A "fox-trot economy" refers to an unexpected pattern of economic growth and activity in which an economy experiences two periods of fast growth and another two periods of slow growth. This term follows the pattern of the fox-trot dance which has two fast steps and two slow steps. When an economy exhibits the fox-trot economic pattern, it experiences two periods of economic expansion and growth, followed by two periods of economic decline. Hence, this economy shows fast-fast movement, followed by slow-sow movement.
Back to:ECONOMIC ANALYSIS & MONETARY POLICY
How does a Fox-Trot Economy Work?
A fox-trot economy has a basic pattern, which is two fast movements and then two slow movements. This economic depiction was made popular by Jeffery Saut and it describes economic growth as a period when an economy produces more goods and services and slow growth as a period when production declines. The fox-trot pattern is one of the economic patterns that predicts the dynamics of growth in an economy.
Origin of the Fox-Trot Economy
The fox-trot economy originated from the popular fox-trot ballroom dance in which two fast steps are taken by the dancer and two slow steps. When applied to an economy, it depicts a pattern of two periods of rapid growth followed by two periods of slow growth. The term "fox-trot economy" became popular in the early 2000s when Jeffery Saut, an investment strategist developed the term in an economic context.
The Impact of a Fox-Trot Economy
In a fox-trot economy, during the periods of rapid growth, there is high spending and consumption in the economy with less saving, however, when the economic growth becomes slow, individuals begin to save rather than spend. Investors, retailers and businesses also experience a fair share of challenges in a fox-trot economy as rapid economic growth is followed by slow growth. For instance, periods of slow growth in an economy are often volatile than when there is economic growth. However, in a fox-trot economy, the economy bounces back, even after periods of slow growth.
Related Topics
- What is Government Spending?
- Autonomous Spending
- Autonomous Consumption
- Fiscal Policy
- Expansionary Fiscal Policy
- Contractionary Fiscal Policy
- Progressive vs Regressive Tax
- Marginal Tax Rates
- Proportional Tax
- Trickle Down Theory
- Discretionary Fiscal Policy
- Automatic Stabilizers
- Effects of Discretionary Policy (Interest Rates & Lags)
- Crowding Out Effect
- National Debt
- Government Borrowing
- Golden Rule
- Ricardian Equivalence
- Balanced Budget - Deficit and Surplus
- National Debt
- Standardized Employment Budget
- Deficit Hawk
- Austerity
- Twin Deficits
- Fiscal Policy and the Aggregate Supply and Demand Curve
- Stabilization Policy
- Robin Hood Effect
- Ricardo Barro Effect
- Automatic Stabilizers
- Standardized Employment Budget
- How Does Fiscal Policy Affect Interest Rates?
- Crowding Out
- Types of Lag in Fiscal Policy
- Temporary and Permanent Fiscal Policy
- Limitations of Fiscal Policy?
- How Politics Affects Discretionary Fiscal Policy
- Government Borrowing
- National Savings and Investment Identity
- Debtor Nation
- Fiscal Policy Affects Trade Balances
- Twin Deficits
- Exchange Rates Affect Budget and Trade Deficits
- What are the risks of chronic large deficits in the United States?
- How Fiscal Policy Can Affect Trade Imbalances
- Government Borrowing Affect Private Savings
- Ricardian Equivalence
- Fiscal Policy Affects Investment and Economic Growth
- Crowding Out of Physical Capital Investment?
- How Does Government Borrowing Affect Interest Rates in Financial Markets?
- Government Investment in Physical Capital
- Public Investment in Human Capital
- Fiscal Policy Can Affect Technology Development
- Economic Cycle or Business Cycle
- Business Cycle Indicator
- Peak and Trough
- Recession and Depression
- Hard Landing vs Soft Landing
- Economic Bubble
- Boom and Bust Cycle
- Great Depression
- Baby Boomer Age Wave Theory
- Skyscrapper Effect (Economics)
- V-Shaped Recovery
- W-Shaped Recovery
- U-Shaped Recovery
- Kondratieff Wave Cycle
- Contagion
- Feedback Rule Policy
- American Customer Satisfaction Index
- CNN Effect
- Bureau of Economic Analysis
- Business Starts Index
- American Recover and Reinvestment Act
- Abenomics
- Emergency Economic Stabilization Act of 2008
- Commodity Credit Corporation
- Humphrey Hawkins Act
- Stagnation
- Neoclassical Growth Theory
- Exogenous Growth Theory
- Endogenous Growth Theory
- New Growth Theory - Explained
- Classical Growth Theory - Explained
- Real Economic Growth Rate - Explained
- Plutonomy