Economic booms are followed by recessions because over time excesses build up (because of over-optimism, over-investment, unrealistic expectations, herd instinct, risk taking), like an explosive mixture, which is then ignited by the spark of a shock (like a jump in oil prices, a war, a bank failure).
After the blast, there is a sudden vacuum, business and consumer confidence falls and people reduce their spending, leading to a recession.
Eventually, given time to tease out inefficiency, inventory, and government action, confidence returns and spending increases, unemployment eases and it is boom time again. *
* Rupert Hart. Recession Storming, (CreateSpace, 2008).
