An economic expansion is a period of at least two quarters of increasing output and employment. Wesley Claire Mitchell published a book titled Business Cycles in 1913 in which he described the way a capitalist economy generates recessions and expansions. Mitchell argued that recessions and expansions are normal aspects of the working of a capitalist economy.
Industrial capitalists are the first recipients of the gross profits.
In practical terms, most industrial capitalists take the form of boards of directors of capitalist firms. The total output and employment of capitalist firms is decided upon by these boards of directors and implemented by their hired managers. Thus, at the aggregate level, the output and employment of a capitalist society is primarily determined by the decisions of boards of directors of the capitalist firms comprising the core of the capitalist economy. In order to make sense of the business cycle, one must then make sense of the decision to invest or not invest in new plant, equipment, and hired productive laborers by these boards of directors. The key determinant of investment in a competitive capitalist economy is the rate of profit.