World economy is frequently affected by fluctuations that occur recurrently with a certain periodicity. The predictability of economic fluctuations is low. Frequency and magnitude of cycles is generally reduced. Economy cycles belong to the economy’s DNA. It is measured by different indicators, but the most important is GDP. There are four types of economic cycles: Kitchin (Stocks), Juglar (Investment), Kuznets (Infrastructure), Kondratiev (Technological Innovation). Right now, science and technology are going through major changes that lead to an economic crisis of the Kondratiev model. Fiscal and monetary policy can alleviate fluctuations. Theories explaining economic cycles: overinvestment (misallocation of rare resources), Keynesiana (insufficient aggregate demand), monetarist (lack of monetary discipline), real business cycle (aggregate supply in change), neo Keynesiana (market imperfections), consensus (all factors considered). The financial cycle has been little considered so far. The financial cycle greatly influences the economic cycle, finances allocate resources and creates purchasing power. The financial cycle has a different structure than the economic one. It can use fiscal and monetary policies to direct it. The only paradigm that links the economic and financial cycles is the Austrian economic paradigm. In practice and current economic theory, there is a desire for a coincidence in time between the phases of the economic cycles of the various state entities of the United States and a convergence of evolution towards the same qualitative and quantitative characteristics. This implies an identity of cultural, historical, economic, political, and psychological evolution of the EU, which can not be achieved even between close regions of the same national state. The lack of barriers to the circulation of economic information (goods, services) between regions will lead to an approximate coincidence of economic evolution, but starting from the psychic structure of the inhabitants of a region, the cultural, religious and cultural heritage passing through the capital, the economic zones differ and to force them in different directions will lead to unnecessary fragmentation lines. The anticipated outcome of the study: It is desirable to leave economic areas to evolve in their own terms rather than leveling and uniforming them by economic manipulation techniques. It is preferable to use the method of scientific abstraction and deductive apriorism during the study.
Academic discourse has recently seen an increase in its attention to the emergence of a new crisis. As usual, every well-known economist, university professor and researcher attempts to make theoretical or practical arguments about how a hypothetical crisis unfolds and to identify its possible underlying causes. The desire for notoriety pushes economists to random expectations. Slightly panic-stricken, economists adept at different theoretical approaches to business cycles predict a bleak future. Several schools of economic thought have provided different explanations for crises and economic cycles (at a first count, there are about 12 more significant ones and 2-3 more secondary ones); to which we may add the explanations of historians, sociologists, etc. In economics textbooks, four names appear more frequently in the chapters on economic cycles: Kitchin, Juglar, Kuznetz and Kondratieff; and there are often explanations of cycles in the Keynesian line of thinking. Usually, the focus of the textbooks falls on Nikolai Kondratieff’s long cycles. Although the eponymous economist did not give clear explanations as to the causes of cycle production and their identification is empirical, his followers have identified this type of cycle for more than 1000 years. It therefore cannot be a mere coincidence. The question is: can we bring something new to this field? We think so. And we believe that we can explain the issues that have escaped Kondratieff, we can especially identify the causes of long cycles. How do we propose to accomplish this? The answer lies in using Professor Adrian Bejan’s Constructal Theory. This theory speaks of the economy in terms of flow systems: systems that evolve and grow to facilitate the flow as well as decrease the resistances and spread them evenly throughout the systems involved.
Modern economies are disturbed by recessions that became more and more globalized, much contagious between countries and regions and with higher negative impact during recessions. In this dynamic context, the recovery after recession is essential to prepare the economy for the next business cycle. Understanding of these business cycles (their causes and impact) is fundamental for public policies that should avoid to be pro-cyclical and to add more vulnerabilities to the existing ones. The economic resilience is now a key concept and refers to the capacity of the economy to recover after any recession. The aim of this paper was to explore the relationship between the dimension of the state and the resilience of the economic system by using a global panel data. The study includes 87 countries (870 observations) and data covering 2009 – 2019 provided by World Bank. We used 2 depending variables: GDP gap and GDP per capita gap and 12 explanatory variables grouped in 4 categories: dimension of the state, the quality of public governance, economic development and regional/global economic dependence). The results are robust and significant, confirming that the dimension of the public intervention and the quality of the public governance & administration have a clear impact on the economic resilience and recovery between business cycles.
The signs of a new crisis appear. Some countries are moving towards real assets (gold, oil); the real estate market froze, as did the credit market; sales are on a global decline. The world has become accustomed to economic cycles and crises. At the theoretical level, efforts are aimed at finding practical methods of prevention and especially of combating the negative effects on economic cycles. The market of theories regarding the internal causes and mechanisms of economic cycles has stabilized. The theoretical barricades were formed and strengthened and now the projectiles are thrown from one side to another. Demand theories and supply theories give partial explanations, but with claims of total theories. Is it possible to see something new at the theoretical level about the causes and mechanisms of economic cycles? We think so. We believe that the Constructal Theory of Professor Adrian Bejan has an explanatory power over the present theories about the causes of the economic cycles. The perspective offered by this theory is new and offers explanations for aspects that are difficult to understand in other theories. Through this article we want a rewriting of economic history, from the perspective and through the lens of this theory. We believe that we offer a broader and deeper explanation of the causes of economic cycles using a theoretical tool borrowed from other sciences, but with great explanatory powers in the social sciences. We will rewrite the economic history by discussing: S-evolution of economic stages; overlapping economic flow systems; systems evolving from one another; increased resource consumption and increased resource efficiency. The results of this study indicate that abusive interventions in the economic system create problems. The economic system, which is essentially a flow system, like any other system, must be allowed to evolve freely.
Through this article we will try to get into the way of thinking of one of the most important economic schools, namely the Austrian School. Over time, many mistakes have been made by various economic schools because the fundamentals of thinking were not clear or the concepts used were not properly defined. Here we will try to clarify the foundation in general of the socio-human sciences and in particular of the mentioned school. Building theories or opinions on a fragile foundation will certainly give rise to a friable architecture. Among the various philosophers who have approached science, we believe that von Wight has a direct and clear approach to the type of human social thinking. From the information we have we do not know an approach similar to this article. The Austrian School has hitherto been understood as a methodology from the perspective of Aristotelianism. The question is whether a new perspective can make more sense. The methodology of presenting the article is narrative argumentation. The questions we try to answer in the conclusions are those related to understanding the present moment and discerning the future moment through the fog. The conclusions will be critical regarding the use of mathematics in the socio-human sciences, and the socio-human sciences must be understood only from the perspective of human motivations and intentions. Clarifying the starting point in economic thinking makes us more modest in drawing conclusions and making predictions about the future.
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