Equilibrium Business Cycle Theory in Historical Perspective

Kyun, Kim Seo

doi:10.1017/cbo9780511664762

Cited by 19 publications

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“…Great progress was made in relation to the theory of business cycles, reflecting the fact that economic dynamics has become a substantially independent subject of study (Tinbergen 1934). At the international level, different competing research programs arose in the 1930s (Kyun 1988; Boumans 2005, pp. 21–74), and at the end of this period Paul Samuelson’s approach emerged as the dominant perspective, as expressed in the final part of his Foundations of Economic Analysis (1947).…”

Section: Introductionmentioning

confidence: 99%

Economic Dynamics and the Calculus of Variations in the Interwar Period

Pomini

2018

J Hist Econ Thought

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Analogies with rational mechanics played a pivotal role in the search for formal models in economics. In the period between the two world wars, a small group of mathematical economists tried to extend this view from statics to dynamics. The main result was the extensive application of calculus of variations to obtain a dynamic representation of economic variables. This approach began with the contributions put forward by Griffith C. Evans, a mathematician who, in the first phase of his scientific career, published widely in economics. Evans’s research was further developed by his student Charles Roos. At the international level, this dynamic approach found its main followers in Italy, within the Paretian tradition. During the 1930s, Luigi Amoroso, the leading exponent of the Paretian School, made major contributions, along with his student Giulio La Volpe, that anticipated the concept of temporary equilibrium. The analysis of the application of the calculus of variations to economic dynamics in the interwar period raises a set of questions on the application of mathematics designed to study mechanics and physics to economics.

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Section: Introductionmentioning

confidence: 99%

Economic Dynamics and the Calculus of Variations in the Interwar Period

Pomini

2018

J Hist Econ Thought

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“…No other economic issue has been devoted so much attention as the issue of business cycles (Kyun, K., 1988) As is usual when the period of economic expansion is unusually long, there were views among economists during the boom of the 1990s that this might be the beginning of a «new economics», based on innovations in information technology, and that serious recessions would remain only the examples from economic history (Sorensen, P.B. and Whitta-Jacobson, H. J., 2005) 24 .…”

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confidence: 99%

The return to keynesianism in overcoming cyclical fluctuations?

Prascevic

2008

EKON ANAL

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The problems faced by the American economy in the second half of 2007, which intensified in 2008, have once again asked economic science, and even more so economic policy, questions relating to business cycles - the reasons for cyclical fluctuations, the character of business cycles and, naturally, economic policy measures that can be implemented to alleviate and overcome an economic recession. Since the 1970s, business cycle theories have been intensively developed - ranging from monetary theories, developed within monetarism and the first phase of New Classical Macroeconomics, to the real business cycle theory of New Classical Macroeconomics. Consequently, the triggers for the beginning of a cycle can be monetary (monetary theories) or real in the form of technological shocks (real business cycles). In essence economic policy conducted since the 1970s, has rejected the Keynesian explanations of the functioning of the economic system, and thus the policy of aggregate demand management. However, the measures that are now being implemented in the USA point to a return to Keynesianism. This refers, above all, to attempts to compensate for the inefficiency of monetary policy with fiscal expansion. All three psychological propensities (propensity to consume, propensity to invest and liquidity preference) in Keynes's theory and applied in Keynesian economic policy, are still the significant determinants of monetary and fiscal policies. The return to Keynesianism points to the depth of the crisis faced by the USA, but also confirms the vitality of Keynesian economics and affirms the view that - although Keynes wished to present his theory as being "general" - it is actually the theory of economic depression

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“…Economics experienced the so-called rational expectations revolution during the 1960s (Begg, 1982;Guzzardi, 1978;Kim, 1988;Klamer, 1983). Its central idea was that individuals should not make systematic mistakes.…”

Section: Rational Expectations Economicsmentioning

confidence: 99%

Sargent, Thomas J. (born 1943)

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The New Palgrave Dictionary of Economics

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Thomas J. Sargent is the 2011 recipient of the Nobel Prize in Economic Sciences (along with Christopher Sims). Sargent has been instrumental in the development of rational expectations economics. The central idea behind this approach is that individuals should not make systematic mistakes. Yet what does it mean for individuals not to make systematic mistakes? Four distinct phases may be identified in Sargent's search for an answer to this question.

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Equilibrium Business Cycle Theory in Historical Perspective

Cited by 19 publications

References 0 publications

Economic Dynamics and the Calculus of Variations in the Interwar Period

Economic Dynamics and the Calculus of Variations in the Interwar Period

The return to keynesianism in overcoming cyclical fluctuations?

Sargent, Thomas J. (born 1943)

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