Economists have accepted for years that national economies do not grow steadily and continuously. Instead, economic activity tends to be dynamic, with periods of relatively rapid growth followed by periods of stagnation, contraction or recession.

In 1860, French economist Clement Juglar identified the presence of economic cycles of about ten years duration. Later, Austrian economist Joseph Schumpeter argued that an economic cycle has four stages: expansion, crisis and recession, followed by recovery. In this model, recovery and prosperity are associated with increases in productivity, consumer confidence, aggregate demand, and prices.

Over the past 50 years or so, economic cycles have been more restrained and predictable than those in the 19th Century and first half of the 20th Century. Economic stabilisation using fiscal and monetary policies appeared to have dampened the worse excesses of economic cycles, although it can be argued that the downturn of 2008/09 demonstrated a lack of rigour in assessing the vulnerability of the free market. The downturn also demonstrated how the global economy is becoming ever more complex and our financial systems are becoming ever more interdependent.

Gary Hamel and Liisa Välikangas showed great foresight in their paper on The Quest for Resilience published in the Harvard Business Review in September 2003 by predicting a global economic crisis later in the decade that would lead to the collapse of a number of iconic US companies. They argued that successful organisations were those who understood the dynamic nature of their business environment and who were able and willing to adapt to sudden and large changes to the environment.

In the aftermath of the 2008/09 economic downturn, considerable interest is being shown on the resilience of the free market, and whether fiscal policies need to place greater emphasis on steady and predictable economic growth resulting in a less volatile and more resilient international economy.