Many people look at a chart that goes up and down and imagine they see cycles. It's popular to speak of business cycles, for example. Unfortunately, it is not clear that anything in the economy oscillates such that it's appropriate to describe the system as having cycles.
You might have heard of Fourier transforms. Any time-series can be transformed into its sinusoidal components, even if a composition of waves is not a good model.
It's possible, and in my opinion more likely, that the business cycle is not a cycle at all.
Close. It's more a comment on the structure of those random variations, and whether it's appropriate to describe the system as periodic at all.
For example, sometimes it rains, and sometimes the sun shines. Is the weather cyclical? Depends on the place, time, and time-scale you're considering.
Maybe a better example is roulette. If you watch the "cycles" of red and black, you might imagine you could make predictions. Gamblers are often fooled by this randomness.
This is a good observation that I upvoted because it's very relevant. A lot of things look like cycles but have no oscillating dynamic, it's true.
But you could suppose that business cycles are caused by a build-up of bad debt. Things to well, debts can be paid, collateral gets worth more, more investment, etc. This can't go on forever and the reverse cycle then occurs, often as rates come up. Soros store about this and called it reflexivity.
Of course I'm not saying business cycles are definitely caused by this, there's probably more to it than that. But it's a common explanation.
Why does it build up? A generalized autoregressive model explains that just as well as an oscillator does. The key difference is how predictable the periods are. The more waves you're composing to force the oscillator model to fit, the less likely it's appropriate.