The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Credit Cycle

  • P. Bridel
Reference work entry


It was with the post-First World War attempts to integrate marginalist value and monetary theory that theorists started pondering the possible (in Hayek’s words) ‘incorporation of cyclical phenomena into the system of economic equilibrium theory’. Hayck’s own ‘intertemporal equilibrium’ approach overturned the traditional view of cycles as temporary deviations from long-period equilibrium conditions. But the publication of Keynes’s General Theory redirected research efforts towards the determination of output at a point in time. Since the late 1960s, with the search for ‘microfoundations for macroeconomics’, this line of thought has been back on the theoretical agenda.


Bank rate Cambridge School Capital theory Credit cycle Cumulative process Forced saving Full employment saving Hawtrcy, R. G. Hayek, F. A. von Intertemporal equilibrium Keynes, J. M. Marginal revolution Microfoundations Monetary theory of interest Natural rate and market rate of interest Quantity theory of money Rational expectations Robertson, D. Saving and investment Temporary equilibrium 

JEL Classifications

This is a preview of subscription content, log in to check access.


  1. Fisher, I. 1911. The purchasing power of money. New York: Macmillan.Google Scholar
  2. Hawtrey, R.G. 1913. Good and bad trade. London: Constable.Google Scholar
  3. von Hayek, F.A.. 1929. Monetary theory and the trade cycle. Trans: N. Kaldor and H.M. Cromc. London: Jonathan Cape, 1933.Google Scholar
  4. von Hayek, F.A. 1941. The pure theory of capital. London: Routledge.Google Scholar
  5. Keynes, J.M. 1930. A treatise on money, The pure theory of money, vol. 1. As in Collected writings, vol. 5. London: Macmillan, 1971.Google Scholar
  6. von Miscs, L. 1912. The theory of money and credit. Trans. H.E. Batson. London: Jonathan Cape, 1934.Google Scholar
  7. Schumpeter, J.A. 1954. History of economic analysis. London: Oxford University Press.Google Scholar
  8. Tooke, T. 1844. An inquiry into the currency principle. London: Longman, Brown, Green & Longmans.Google Scholar
  9. Wicksell, K. 1898. Interest and prices. Trans. R.F. Kahn. London: Macmillan, 1936.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • P. Bridel
    • 1
  1. 1.