Technology, Innovation and International Industrial Transformation

Abstract

The purpose of business cycle theory has been to analyse the cyclical movement of a number of total categories which are considered to be characteristic of cyclical behaviour in business activity. It has been difficult for those carrying out historical research to understand why business cycles have been extracted as a special problem. A historical analysis which reconstructs the factual historical developments should explain the business cycle without a special theory of business cycles. Business cycle theorists criticise the work of the historians as incomplete, in part for their failure to emphasise the periodicity of the phenomenon. The purely descriptive method of the historian cannot lead to an adequate understanding of the rhythm of economic activity nor to fruitful points of departure for business cycle policy.