Business cycle

"Business-cycle theorists concerned themselves with why the economy naturally generated fluctuations in employment and output, [while the rest of the profession] continued to operate on the assumption that full employment was the natural, equilibrium position for the economy."

"This book offers an analytic description of the complicated processes by which seasons of business prosperity, crisis, depression, and revival come about in the modern world. The materials used consist chiefly of market reports and statistics concerning the business cycles which have run their course since 1890 in the United States, England, Germany and France."

"The other mystery is the reason why there is a business cycle - the irregular rhythm of recessions and recoveries that prevents economic growth from being a smooth trend."

"The postwar era has not surprised Arthur Burns, for business cycles have continued their "unceasing round." although the United States recession of 1981-82 was the eighth since World War II and the deepest postwar slump by almost any measure, the 1983-84 recovery displayed an upward momentum sufficient to befuddle forecasters and delight incumbent politicians. Nor would a reincarnated Joseph Schumpeter be disappointed in the current status of business cycle research in the economics profession. To be sure, interest in business cycles decayed during the prosperity of the 1960s, as symbolized in the 1969 conference volume, Is the Business Cycle Obsolete? and in Paul Samuelsons remark the same year that the National Bureau of Economic Research "has worked itself out of one of its first jobs, namely, the business cycle."

"No two business cycles are quite the same; yet they all have much in common. They are not identical twins, but they are recognizable as belonging to the same family."

"For well over a century business cycles have run an unceasing round. They have persisted through vast economic and social changes; they have withstood countless experiments in industry, agriculture, banking, industrial relations, and public policy; they have confounded forecasters without number, belied repeated prophecies of a "new era of prosperity" and outlived repeated forebodings of "chronic depression."

"Business cycles are a type of fluctuation found in the aggregate activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion phase of the next cycle; this sequence of changes is recurrent but not periodic; in duration business cycles vary from more than one year to ten or twelve years; they are not divisible into shorter cycles of similar character with amplitudes approximating their own."

"Periodically, our economic system becomes the spectacle of unemployed men who are able and eager to work; abundant tools to work with and materials to work upon; and a nation in need of the goods that these men, by the use of these idle machines, might make out of these surplus materials. Yet, month after month, the men and machines and materials are not brought into productive relations with each other."

"Analyzing business cycles means neither more nor less than analyzing the economic process of the capitalist era.... Cycles are not like tonsils, separable things that might be treated by themselves, but are, like the beat of the heart, of the essence of the organism that displays them."

"Inevitably, any attempt to break down the past down into cycles involves beginning and ending points that are, to some degree, arbitrary. Others might well divide the markets cycles somewhat differently. But virtually every market historian agrees on the larger picture: the history of the market is a story of bull and bear markets that take place against a backdrop of much longer waves—weak and strong cycles that last long enough to convince us that they are the norm."