General Introduction

Abstract

The traditional view of business cycles is usually presented through Wicksell’s famous ‘rocking horse’ metaphor. If a rocking horse is hit with a stick, the horse will move and its movement will be different from that of the stick. In other words, erratic exogenous ‘shocks’ are the cause of economic cycles (providing the necessary energy to keep the horse moving) and the fundamental law which determines the form of these cycles is given by the equilibrium conditions of the economic system.