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Uncertainty and Contradiction: An Essay on the Business Cycle

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  • Michalis Nikiforos

Abstract

This paper presents a discussion of the forces at play behind the economic fluctuations in the medium run and their relation with the short-run macroeconomic equilibrium. The business cycle is the result of two separate phenomena. On the one hand, there is the instability caused by the discrepancy between expected and realized outcomes. On the other hand, this instability is contained by the inherent contradictions of capitalism; the upswing carries within it "the seeds of its own destruction." The same happens with the downswing. The paper provides a formal exposition of these insights, a discussion of how the formulation of this mechanism resembles the simple harmonic motion of classical mechanics, and an empirical evaluation.

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  • Michalis Nikiforos, 2013. "Uncertainty and Contradiction: An Essay on the Business Cycle," Economics Working Paper Archive wp_770, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_770
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    Cited by:

    1. Michalis Nikiforos, 2016. "Distribution-led Growth through Methodological Lenses," Economics Working Paper Archive wp_879, Levy Economics Institute.

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    More about this item

    Keywords

    Cycles; Harrod; Oscillations; Distribution;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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