Economics Dictionary of ArgumentsHome
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| Business cycle: The business cycle refers to the fluctuations in economic activity over time, including expansion, peak, contraction, and trough. It reflects changes in GDP, employment, and production, influenced by factors like investment, consumer demand, and government policies. These cycles are natural but vary in duration and intensity. See also Economy, Economic cycles, Economic boom, Depression._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Dictionary of Arguments. | |||
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Economic Theories on Business Cycle - Dictionary of Arguments
Rothbard III 1007 Business cycles//economic theories/Rothbard: The business-cycle analysis set forth here has essentially been that of the "Austrian" School, originated and developed by Ludwig von Mises and some of his students.(1) Full employment/VsMises/VsAustrian school/VsRothbard: A prominent criticism of this theory is that it "assumes the existence of full employment" or that its analysis holds only after "full employment" has been attained. Credit expansion: Before that point, say the critics, credit expansion will beneficently put these factors to work and not generate further malinvestments or cycles. RothbardVsVs: But, in the first place, inflation will put no unemployed factors to work unless their owners, though holding out for a money price higher than their marginal value product, are blindly content to accept the necessarily Iower real price when it is camouflaged as a rise in the "cost of living." And credit expansion generates further cycles whether or not there are unemployed factors. It creates more distortions and malinvestments, delays indefinitely the process of recovery from the previous boom, and makes necessary an eventually far more grueling recovery to adjust to the new malinvestments as well as to the old. Capital goods: If idle capital goods are now set to work, this "idle capacity" is the hangover effect of previous wasteful malinvestments, and hence is really sub-marginal and not worth bringing into production. Putting the capital to work again will only redouble the distortions.(2) 1. Mises first presented the "Austrian theory" in a notable section ofhis Theory of Money and credit, pp. 346-66. For a more developed statement, see his Human Action, New Haven, Conn.: Yale University Press, 1949. Reprinted by the Ludwig von Mises Institute, 1998. pp. 547-83. For F.A. Hayek's important contributions, see especially his Prices and Production, and also his Monetary Theory and the Trade Cycle (London: Jonathan Cape, 1933), and Profits, Interest, and Investment. Other works in the Misesian tradition include Robbins, The Great Depression, and Fritz Machlup, The Stock Market, Credit, and Capital Formation (New York: Macmillan & Co., 1940). 2. See Mises, Human Action, New Haven, Conn.: Yale University Press, 1949. Reprinted by the Ludwig von Mises Institute, 1998. pp. 5 77-78; and Hayek, Prices and Production, pp. 96-99. _____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. "Vs" indicates differences in content, not necessarily the chronological progression of a controversy. If a German edition is specified, the page numbers refer to this edition. |
Economic Theories Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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