Introduction

Abstract

Business cycles are macroeconomic phenomena. They are defined as more or less regular fluctuations in the aggregate economic activity of nations and reflected in the serial correlations of key macroeconomic series, such as output, consumption, investment, employment, and inflation. Business cycle theorizing attempts to explain this cyclical behaviour of economic aggregates. Which are the forces that induce the economy to fluctuate? Individual decisions of a large number of economic agents on different markets lead neither to states of stationary equilibrium nor to an entirely chaotic evolution of the economy, but to a more or less regular sequence of booms and depressions.