Prosperity and Depression.pdf

CHAPTER 8SOME RECENT DISCUSSIONSRELATING TO THE THEORY OF THE TRADE CYCLE§ I. INTRODUCTIONThe greater part of the literature to be discussedGeneral nature in this chapter emanates from, and centres around,of the Mr. KEYNES' General Theory of Emplqyment, Interestliterature and Money. It i~ not all business-cycle theory inret1iewed. a strict sense, but rather general economic theorydealing with analytical tools which 'may be usedfor trade-cycle analysis as well as for other purposes. To alarge extent, the theories to be discussed are not even ofa dynamicnature, but are static-equilibrium theories. (This point will comeup for detailed discussion in § 6 of this chapter.)For a number of reasons, it is very difficult to review thesetheories. First, they are comparatively young and have not yetfound anything like a definitive formulation. They are still in theprocess of development and clarification; there exist, and continueto appear, versions 1 which are by no means identical in all respects.The points at issue are frequently very subtle, and the argumentnecessarily becomes complicated and involved.1 Ct. mainly contributions by various writers to recent issues of theEconomic Journal, Econometrica, Economica, Zeitschrilt fur Nationalokonomie,Quayterly Journal of Economics, etc