A Brief Historical Survey of the Trade Cycle

Abstract

In this chapter we introduce what we consider to be the essential features of the observed trade cycle. We start by explaining our reasons for concentrating on the mid-nineteenth century; though we do, on appropriate occasions, include evidence from other periods. Then we examine the conventional classification of cycles, to establish the particular type of cycle (the major cycle) which interests us. We go on to describe, in some detail, the observed features of a particular, but we believe a typical, nineteenth century crash. Finally we extract, from this information, the two main characteristics of observed cycles which we consider to be of outstanding theoretical importance: (1) The asymmetry between slow rise and fast fall; and (2) The sheer speed of the “crash” phase.