Route 1 was bustling on that day in 2014. But if you’d visited the malls in 2008, the scene wouldn’t have been quite as cheerful. That’s because New Jersey’s economy, along with that of the United States as a whole, was depressed in 2008: in early 2007, businesses began laying off workers in large numbers, and employment didn’t start bouncing back until the summer of 2009.

Such troubled periods are a regular feature of modern economies. The fact is that the economy does not always run smoothly: it experiences fluctuations, a series of ups and downs. By middle age, a typical American will have experienced three or four downs, known as recessions. (The U.S. economy experienced serious recessions beginning in 1973, 1981, 1990, 2001, and 2007.) During a severe recession, millions of workers may be laid off.

Like market failure, recessions are a fact of life; but also like market failure, they are a problem for which economic analysis offers some solutions. Recessions are one of the main concerns of the branch of economics known as macroeconomics, which is concerned with the overall ups and downs of the economy. If you study macroeconomics, you will learn how economists explain recessions and how government policies can be used to minimize the damage from economic fluctuations.

Despite the occasional recession, however, over the long run the story of the U.S. economy contains many more ups than downs. And that long-run ascent is the subject of our final question.