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Early theories of business cycle and their role on the development of economics

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  • Kaloyan Ganev

Abstract

This is a brief review of one of the most important theories about the factors causing cyclic fluctuations in economy. Starting from the postulates the classical economic school and its inability to explain the existence of prolonged deviations from full employment, and economic crises in particular, conclusions on the role of the early theories for the development of economic knowledge are drawn. A major contribution thereto are the presented key issues driving the search for the truth in economics until the present day: whether the economic system is stable; whether equilibria corresponding to employment levels different from full employment exist; how to treat the exogenous influences and whether the cyclic fluctuations result from one factor only.

Suggested Citation

  • Kaloyan Ganev, 2014. "Early theories of business cycle and their role on the development of economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 39-56.
    • Handle: RePEc:bas:econth:y:2014:i:3:p:39-56
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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