The Econometric Approach
The previous two chapters should not be regarded as a summary of a ‘theory’ of the cycle; a more apt description would be ‘an analysis of some logical constructions which at one time or another have been believed to provide an explanation of the trade cycle, but which on closer inspection probably do not’. Thus some writers still refer to ‘the multiplier-accelerator theory of the cycle’, but as a matter of simple mathematics, multiplier-accelerator interaction is neither necessary nor sufficient to give rise to oscillations and will not give rise to self-generating oscillations, without damping or explosion, except in a very particular case.
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