Prosperity and Depression.pdf

111/rotltiGtiollThe second part of the present report-the C( Syn­SYll/hltit thetic Exposition relating to the Nature and CausesIxpoJilifJII of of Business Cycles"-contains the comprehensivetIN nalRn of explanation which emerges from the analysis ofthe !Jtll. theories in the first part. As has been said, it does notclaim to be an entirely new theory, buta synthesis anddevelopment ofexisting theories, so far as they can be synthesised.What is presented there is furthermore notaclosed and rigid system,but a flexible and open one: there are many points where no definitesolution can be proposed, but whe~e the existence of a. number ofpossibilitieswill be indicated. The choice between these can then bemade· only on the basis ofempirical investigations. In many cases,theoretical reasoning supported only by such broad facts as onehappens to know without special statistical or historical investigationscan putintelligentquestions,butcannotdefinitely answerthem.That by analysing various theories it should be possible to givean explanation of the business cycle which, while leaving somequestions open or offering in other cases alternative answers,neverthelessclari£ies a number of problems. presupposes that thedifference between the theories analysed is not so radical as issometimes believed. In fact, the assumption is that the realdifferences in opinion have been frequently exaggerated, and that,for certain important questions, a much greater harmony betweenwriters of clliferent schools can be established than the superficialobserver- would believe or even than these same writers wouldbe willing .to admit. It is a natural thing that most writers areinclined rather to dwell on the controversial issues than to stressthe points of general agreement. Here the opposite principlewill be followed and, itt the following sections, it will be shownhow theories which seem primafad' to contradict one another cansometimes be reconciled.