"Is the business cycle obsolete?" This often cited title of a book edited by Bronfenbrenยญ ner with the implicit affirmation of the question reflected the attitude of mainstream macroeconomics in the 1960s regarding the empirical relevance of cyclic motions of an economy. The successful income policies, theoretically grounded in Keynesian macroecยญ onomics, seemed to have eased or even abolished the fluctuations in Western economies which motivated studies of many classical and neoclassical economists for more than 100 years. The reasoning behind the conviction that business cycles would increasingly beยญ come irrelevant was rather simple: if an economy fluctuates for whatever reason, then it is almost always possible to neutralize these cyclic motions by means of anticyclic demand policies. From the 1950s until the mid-1960s business cycle theory had often been considยญ ered either as an appendix to growth theory or as an academic exercise in dynamical economics. The common business cycle models were essentially multiplier-accelerator models whose dependence on particular parameter values (in order to exhibit oscillatory motion) suggested a rather improbable occurrence of persistent fluctuations. The obviยญ ous success in compensating business cycles in those days prevented intensive concern with the occurrence of cycles. Rather, business cycle theory turned into stabilization theory which investigated theoretical possibilities of stabilizing a fluctuating economy. Many macroeconomic textbooks appeared in the 1960s which consequently identified business cycle theory with inquiries on the possibilities to stabilize economies by means of active fiscal or monetary policies
CONTENT
Preface -- 1. Fluctuations in Major Economic Variables -- 1.1. Periodic Patterns and Stylized Facts -- 1.2. The Measurement of the Business Cycle -- 2. Shock-Dependent Business Cycle Theories -- 2.1. Discrete-Time Shock-Dependent Models -- 2.2. Continuous-Time Shock-Dependent Models -- 2.3. The Kalecki Model and Mixed Difference-Differential Equations -- 2.4. The Relevance of Shock-Dependent Business Cycle Theories -- 3. Business Cycle Theory and Exogenous Shocks -- 3.1. The Political Business Cycle -- 3.2. The Theory of Stochastic Business Cycles -- 3.3. The Rational Expectations Approach to Business Cycles -- 4. Shock-Independent Business Cycle Theorie -- 4.1. A Linear Shock-Independent Growth Cycle Model -- 4.2. Goodwinโs Quasi-Non-Linear Accelerator -- 4.3. Non-Linear Theories of the Cycle -- 5. Complex Motion in Business Cycle Models -- 5.1. Non-Linearities and Chaotic Movements -- 5.2. Catastrophe Theory and Business Cycle Theory -- 5.3. Structural Instability and Business Cycle Theory - Conclusions -- References -- Name Index
