The Bush Business Cycle Profit Rate: Support in a Theoretical Debate and Implications for the Future

2009 ◽  
Vol 41 (3) ◽  
pp. 335-342 ◽  
Author(s):  
Erdogan Bakir ◽  
AL Campbell
Keyword(s):  
Business Cycle ◽  
Profit Rate ◽  
The Future

scholarly journals Optimizing the Procurement of IaaS Reservation Contracts via Workload Predicting and Integer Programming

2020 ◽  
Vol 2020 ◽  
pp. 1-18
Author(s):  
Huamin Zhu ◽  
Jun Luo ◽  
Hongyao Deng
Keyword(s):  
Business Cycle ◽  
Web Application ◽  
Web Applications ◽  
Short Term Memory ◽  
Resource Planning ◽  
Support Vector ◽  
Cloud Infrastructure ◽  
Great Opportunity ◽  
The Future ◽  
Future Business

Cloud-based web applications are proliferating fast. Owing to the elastic capacity and diverse pricing schemes, cloud Infrastructure-as-a-Service (IaaS) offers great opportunity for web application providers to optimize resource cost. However, such optimization activities are confronting the challenges posed by the uncertainty of future demand and the increasing reservation contracts. This work investigates the problem of how to minimize IaaS rental cost associated with hosting web applications, while meeting the demand in the future business cycle. First, an integer liner program model is developed to optimize reservation-contract procurement, in which reserved and on-demand resources are planned for multiple provisioning stages as well as a long-term plan, e.g., twelve stages in an annual plan. Then, a Long Short-Term Memory (LSTM) based algorithm is designed to predict the workload in the future business cycle. In addition, the approaches for determining virtual instance capacity and the baseline workload of planning time slot are also presented. Finally, the experimental prediction results show the LSTM-based algorithm gains an advantage over several popular models, such as the Holter–Winters, the Seasonal Autoregressive Integrated Moving Average (SARIMA), and the Support Vector Regression (SVR). The simulations of resource planning show that the provisioning scheme based on our reservation-optimization model obtains significant cost savings than other typical provisioning schemes, while satisfying the demands.

scholarly journals COLLATERAL CONSTRAINT AND NEWS-DRIVEN CYCLES

2012 ◽  
Vol 16 (5) ◽  
pp. 752-776 ◽  
Author(s):  
Keiichiro Kobayashi ◽  
Tomoyuki Nakajima ◽  
Masaru Inaba
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Labor Supply ◽  
Financial Market ◽  
Driving Force ◽  
Financial Constraints ◽  
Good News ◽  
Collateral Constraint ◽  
The Future ◽  
Market Good

We develop business-cycle models with financial constraints, the driving force of which is news about the future (i.e., changes in expectations). We assume that an asset with fixed supply (“land”) is used as collateral, and firms need to hold collateral to finance their input costs. The latter feature introduces an interaction between the inefficiencies in the financial market and in the factor market. Good news raises the price of land today, which relaxes the collateral constraint. It, in turn, reduces the inefficiency in the labor market. If this force is sufficiently strong, the equilibrium labor supply increases. So do output, investment, and consumption. Our models also generate procyclical movement in Tobin's Q. We also show that when the news turns out to be wrong, the economy may fall into a recession.

scholarly journals Industrial Electricity Usage and Stock Returns

2017 ◽  
Vol 52 (1) ◽  
pp. 37-69 ◽  
Author(s):  
Zhi Da ◽  
Dayong Huang ◽  
Hayong Yun
Keyword(s):  
Growth Rate ◽  
Asset Pricing ◽  
Business Cycle ◽  
Stock Returns ◽  
Real Time ◽  
Risk Premium ◽  
Output Gap ◽  
Financial Variables ◽  
The Future ◽  
The Business Cycle

The growth rate of industrial electricity usage predicts future stock returns up to 1 year with an R2 of 9%. High industrial electricity usage today predicts low stock returns in the future, consistent with a countercyclical risk premium. Industrial electricity usage tracks the output of the most cyclical sectors. Our findings bridge a gap between the asset pricing literature and the business cycle literature, which uses industrial electricity usage to gauge production and output in real time. Industrial electricity growth compares favorably with traditional financial variables, and it outperforms Cooper and Priestley’s output gap measure in real time.

A brief note on economic recessions, banking reform and the future of capitalism

2021 ◽  
pp. 289-298
Author(s):  
Jesús Huerta de Soto
Keyword(s):  
Financial Crisis ◽  
Business Cycle ◽  
Economic Recession ◽  
Central Banks ◽  
Business Cycle Theory ◽  
English Edition ◽  
Austrian Business Cycle Theory ◽  
Fractional Reserve ◽  
The Future ◽  
Austrian Business Cycle

In my book «Money, Bank Credit, and Economic Cycles» (1st Spanish Edition 1992, 2nd English Edition 2009) I present a detailed analysis of the Austrian Business Cycle Theory. Now I will concentrate on the financial crisis and the current worldwide economic recession as one of the most challenging problems we must now cope with and the way in which the Austrian Business Cycle Theory can help us to understand its causes and the best approach to economic recovery. Having witnessed the intellectual and practical defeat of socialism specially during the last decades of the twentieth century, in my opinion one of the main challenges that still remains for the future of Capitalism is the urgent need to privatize money by dismantling the organ of central monetary planning: the Central Bank. In other words, real Socialism, represented by state money, Central banks and financial administrative regulations, is still in force in the monetary and credit sectors of the so called free market economies. As a result of this fact we experience regularly in the area of money and credit all the negative consequences established by the Theorem of the Impossibility of Socialism discovered by those distinguished members of the Austrian School of Economics Ludwig von Mises and Friedrich Hayek. Specifically, the central planners of state money are unable to know, to follow and to control the changes in both the demand and supply of money. Furthermore, the whole financial system is based on the legal privilege given by the state to private bankers to act with a fractional reserve ratio in relation with the demand deposits they receive from their clients. As a result of this privilege, private bankers are not true financial intermediaries, but are mainly creators of deposits materializing in credit expansions. These credit expansions are artificial and do not correspond to any previous increases in the voluntary savings of the citizens. In this way the current fractional reserve banking system, tends to worsen and amplify the systemic intertemporal distortions and investment misallocations that the macroeconomic planners working for central banks induce in the production structure of the whole real economy. These distortions manifest themselves in the stages of financial bubbles, economic boom, overall malinvestment and afterwards in the stages of financial crisis, deep economic recession and unemployment.

SCALES OF TIME AND THE ANTICIPATION OF THE FUTURE: GIBBON, SMITH, PLAYFAIR

2014 ◽  
Vol 11 (3) ◽  
pp. 697-718 ◽  
Author(s):  
JONATHAN SACHS
Keyword(s):  
Political Economy ◽  
Time Series ◽  
Business Cycle ◽  
Adam Smith ◽  
Line Graph ◽  
Temporal Scale ◽  
Economic Decline ◽  
The Future ◽  
Relative Decline ◽  
Pie Chart

This essay shows how Adam Smith addressed concerns about economic decline not only by proposing quantifiable categories through which relative decline could be measured, but also by characterizing the century as the proper timescale in which such quantities could be observed. What sometimes appears up close to be a process of decline and fall, Smith suggested, could, with a shift to a more distant long view, be explained instead as part of a normal business cycle. William Playfair then used Smith's emphasis on quantification to develop elaborate graphic techniques—what we now call the time-series line graph and the pie chart—to visualize more easily the patterns Smith sought to identify. Collectively, the reordering of temporal scale by Smith and Playfair helps us to rethink not only discourses of decline, but also our understanding of the temporalities of political economy as a problem of historical distance that needs to be thought about beyond temporal terms.

Credit cycles: freewheeling, driving or driven?

2015 ◽  
Vol 42 (7) ◽  
pp. 629-643
Author(s):  
Simon Mouatt
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Supporting Evidence ◽  
Real Economy ◽  
Profit Rate ◽  
Content Type ◽  
Financial Factors ◽  
Credit Cycles ◽  
Monetary Neutrality ◽  
The Business Cycle

Purpose – The discourse on credit cycles has been reinvigorated following the global crisis. The purpose of this paper is to contrast the positions of mainstream, Marxist, Austrian and post-Keynesian (PK) schools of thought on these matters. It is posited that most notions underplay the significance of real economy factors in shaping the fluctuations of credit levels and relations. It is argued these ideas are best illustrated by Marx (as interpreted by the Temporal Single System Interpretation) and tendency for the profit rate to fall with accumulation. Empirical evidence on the UK profit rate is provided as supporting evidence. Design/methodology/approach – The paper explores the theoretical work on credit and business cycles from the relevant schools of thought and contrasts them. The aim is to consider which approach best describes the reality. Empirical work on the profit rate provides supporting evidence. Findings – It is argued that the mainstream view of monetary neutrality is an insufficient explanation of the financial reality associated with credit and business cycles. Instead, it is posited that the PK approach, which emphasizes productive and financial factors, is more preferable. This contrasts with the usual singular financialization commentary that is used to describe the financial crisis and real economy stagnation that followed. It is argued that Marx’s notion of falling profit and its ramifications best explain the reality of both the credit and business cycle. This is supported by the evidence. Research limitations/implications – It is problematic to calculate a Marxian rate of profit given the lack of suitable reported statistics. The research illustrates the significance of productive factors, especially the tendency for the profit rate to fall, in driving business cycles. There are, therefore, implications for government fiscal/monetary/industrial policies to reflect these factors when seeking to influence the business cycle. Practical implications – Policies that are designed to target levels of profitability are likely to be beneficial for capitalist sustainability. Social implications – The focus on profitability in the paper informs individuals working in business organizations of some of the imperatives facing corporations in a modern competitive environment. Originality/value – Whether financial factors drive the business cycle, or are themselves driven by it, is an important question given that policy prescriptions will differ depending on the answer. The recent financialization commentary, for instance, suggests that better regulation or reform of the financial sector will preclude unstable business cycles. The paper argues, in contrast, that the cause of the credit instability is rooted in production (following Marx) and that, therefore, a more production-focused policy response is required whilst recognizing the instabilities of the credit system. This latter point has a measure of originality in the current discourse.

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