Konjunkturtheorie und Wirtschaftspolitik

Abstract

Business Cycles Theory and Economic Policy

The development of business cycles theory did not coincide with the development of business cycles themselves. Though no really periodical cyclos occurred in the twentieth century, many economists still speak of lower and upper “turning points” of the sinus curve, which does not exist in real economic life. The course of business activities shows rather “mountains” and “valleys”, where the beginning of one does not correspond with the end of the other and vice versa. A realistic attempt to characterize the course of business cycles and any exact theoretical analysis has to distinguish at least four “turning points”, viz. l) the beginning of the “mountain”, 2) its end, 3) the beginning of the “valley”, 4) its end. After thirteen decades of discussion, of all the attempts to explain the causes of business cycles only the “monetary” theories have survived. Experience in the twentieth century has shown that creeping, autonomous or imported, inflation and political deflation must be regarded generally as causes and only in exceptional cases as a result of business cycles.