scholarly journals Economic Fluctuations in Turkey in the Light of Business Cycle Theories

2012 ◽  
Author(s):  
Emine Fırat
Keyword(s):  
Business Cycle ◽  
Market Failure ◽  
Free Market ◽  
Economic Fluctuations ◽  
Past Century ◽  
Business Cycle Theory ◽  
Macroeconomic Policies ◽  
Business Cycle Model ◽  
The Business Cycle ◽  
The Right

Some economists have tried to demonstrate the cause of economic fluctuations and its solution with business cycle theories. The classical school emphasizes the efficiency of free market economy and the optimization of private economic factors. The Keynesian school believes that the causes of economic fluctuations arise from not only just the deviations from market equilibrium but also market failure on a grand scale. The debate over the source and propagation of economic fluctuations rages as fiercely today as it did in the Great Depression that began in 1929. Economic Fluctuation models investigate to answer the question of why economies go through boom and bust and why economies experience cycles of recession and recovery. In the economic literature, based on the Business Cycle Theories many different approaches have been proposed. While economists discuss the ultimate form of the right business cycle model, they must take into consideration the decisive factors of economic fluctuations in the past century. In this study, the local economic crisis occurred in Turkey in recent years are investigated in the light of Business Cycle Theory and also the effects of macroeconomic policies are evaluated on the basis of economic fluctuations models.

scholarly journals Real Business Cycles: A New Keynesian Perspective

1989 ◽  
Vol 3 (3) ◽  
pp. 79-90 ◽  
Author(s):  
N. Gregory Mankiw
Keyword(s):  
Business Cycle ◽  
Primary Source ◽  
New Keynesian ◽  
Economic Fluctuations ◽  
Real Business Cycle ◽  
Business Cycle Theory ◽  
Macroeconomic Policies ◽  
Real Business Cycles ◽  
The Business Cycle ◽  
Random Fluctuations

Real business cycle theory is the latest incarnation of the classical view of economic fluctuations. It assumes that there are large random fluctuations in the rate of technological change. In response to these fluctuations, individuals rationally alter their levels of labor supply and consumption. The business cycle is, according to this theory, the natural and efficient response of the economy to changes in the available production technology. In this essay, I appraise this newly revived approach to the business cycle. In my view, real business cycle theory does not provide an empirically plausible explanation of economic fluctuations. Both its reliance on large technological disturbances as the primary source of economic fluctuations and its reliance on the intertemporal substitution of leisure to explain changes in employment are fundamental weaknesses. Moreover, to the extent that it trivializes the social cost of observed fluctuations, real business cycle theory is potentially dangerous. The danger is that those who advise policymakers might attempt to use it to evaluate the effects of alternative macroeconomic policies or to conclude that macroeconomic policies are unnecessary.

scholarly journals Is the Virus of International Macroeconomic Interventionism Infectious? An ABCT Analysis

2019 ◽  
Vol 21 (4) ◽  
pp. 339-374
Author(s):  
Walter Block ◽  
Lucas Engelhardt ◽  
Jeffrey Herbener
Keyword(s):  
Business Cycle ◽  
Market Failure ◽  
Consumer Preferences ◽  
Free Market ◽  
Business Cycle Theory ◽  
Credit Expansion ◽  
Market Society ◽  
Government Failure ◽  
Austrian Business Cycle Theory ◽  
The Government

According to Austrian business cycle theory (ABCT), there is no macroeconomic market failure. Under laissez faire capitalism, with extremely limited or no government, there will be no credit-induced business cycles. However, suppose one part of the world engages in credit expansion, which, according to ABCT creates the business cycle, while another does not. Will the former infect the latter? Or will the latter be impervious to the governmental depredations of the former? We take the position that although the free market society will not remain impervious to the government failure of the interventionists, it will be sheltered from the full impact of the boom-bust cycle. Do the residual malinvestments constitute a market failure? After all, a free market, in this case, is indeed "failing" to bring about the greatest satisfaction of consumer preferences. We deny this claim.

scholarly journals Is the Virus of International Macroeconomic Interventionism Infectious? An ABCT Analysis

2019 ◽  
Vol 21 (4) ◽  
pp. 339-374
Author(s):  
Walter Block ◽  
Lucas Engelhardt ◽  
Jeffrey Herbener
Keyword(s):  
Business Cycle ◽  
Market Failure ◽  
Consumer Preferences ◽  
Free Market ◽  
Business Cycle Theory ◽  
Credit Expansion ◽  
Market Society ◽  
Government Failure ◽  
Austrian Business Cycle Theory ◽  
The Government

According to Austrian business cycle theory (ABCT), there is no macroeconomic market failure. Under laissez faire capitalism, with extremely limited or no government, there will be no credit-induced business cycles. However, suppose one part of the world engages in credit expansion, which, according to ABCT creates the business cycle, while another does not. Will the former infect the latter? Or will the latter be impervious to the governmental depredations of the former? We take the position that although the free market society will not remain impervious to the government failure of the interventionists, it will be sheltered from the full impact of the boom-bust cycle. Do the residual malinvestments constitute a market failure? After all, a free market, in this case, is indeed "failing" to bring about the greatest satisfaction of consumer preferences. We deny this claim.

Pandemic Shock: Methodological Explanation and New Public Contract

2021 ◽  
Vol 96 (3) ◽  
pp. 45-52
Author(s):  
I. V. Zikunova ◽  
Keyword(s):  
Business Cycle ◽  
Supply And Demand ◽  
State Regulation ◽  
Business Cycle Theory ◽  
Business Operations ◽  
New Public ◽  
Socio Economic Development ◽  
The Business Cycle ◽  
Post Industrial

The pandemic shock manifested itself as a new phenomenon in the socio-economic dynamics, and thus necessitated a special reflection in the framework of the business cycle theory. In this study we present the results of theoretical positioning of a pandemic shock using the methodology of business cycle theory, in particular, using the principles of the impulse approach. To formulate conclusions, empirical data were used on the processes observed in 2020 in Russia, in the subsystems of supply and demand, in the system of state regulation. The conclusions obtained by the author can be used as sources for the formation of applied scientific problems for the continuation of research within the framework of the theory of business cycle at the post-industrial stage of socio-economic development. These conclusions include a statement of changes in the organization of labor and business operations, changes in the balance of mutual obligations of the parties to a social contract, conclusions about the emergence of new factors in the quality of human development.

scholarly journals NEW PERSPECTIVES ON HENRY LUDWELL MOORE’S USE OF HARMONIC ANALYSIS

2020 ◽  
pp. 1-14
Author(s):  
Paul Turner ◽  
Justine Wood
Keyword(s):  
Business Cycle ◽  
Harmonic Analysis ◽  
Fourier Transformation ◽  
Real Business Cycle ◽  
Business Cycle Theory ◽  
Empirical Economics ◽  
History Of ◽  
Complete Failure ◽  
The Business Cycle ◽  
The Relationship

This paper reconsiders the contribution of Henry Ludwell Moore to dynamic economics through the use of harmonic analysis. We show that Moore’s analysis is innovative in its use of the Fourier transformation for the identification of cycles with different periodicities. This enables Moore to identify cycles of longer length with more precision than would be the case for the standard methodology. We are able to replicate the main features of his results and confirm the existence of a rainfall cycle with a periodicity similar to that of the business cycle (eight years). However, we find that the evidence for a longer (thirty-three-year) rainfall cycle is weaker than Moore indicates. We also argue that a central theme of Moore’s analysis—the relationship among rainfall, agricultural productivity, and the business cycle—marks an early precursor of the “real business cycle” approach. George Stigler’s (1962) dismissal of Moore’s work on cycles as “a complete failure” is therefore, in our opinion, unfair. Instead, we argue that, although his work is certainly flawed, it nevertheless deserves a place in both the history of business cycle theory and empirical economics.

The Impact of Fiscal Policy on Economic Activity over the Business Cycle: An Empirical Investigation in the Case of Algeria

2019 ◽  
Vol 15 (3) ◽  
Author(s):  
Abderrahim Chibi ◽  
Sidi Mohamed Chekouri ◽  
Mohamed Benbouziane
Keyword(s):  
Fiscal Policy ◽  
Business Cycle ◽  
Government Spending ◽  
Economic Recession ◽  
Policy Decision ◽  
Vector Autoregressive ◽  
Asymmetric Effects ◽  
The Business Cycle ◽  
The Right ◽  
The Impact

Abstract In this paper, we aim to analyze whether the effect of fiscal policy on economic growth in Algeria differs throughout the business cycle. To tackle this question, we use a Markov Switching Vector Autoregressive (MSVAR) framework. We find evidence of asymmetric effects of fiscal policy through regimes, defined by the state of the business cycle (recession and boom). The results show small positive government spending and revenue multipliers in the short term in both regimes. Most importantly, fiscal policy shocks have a stronger impact in times of economic recession than in times of expansion, which confirm the hypothesis of asymmetric effects. However, the impact of government spending is stronger than the impact of public revenue during recession periods. In addition, fiscal policy decision-makers interact with Anti-Keynesian view (pro-cyclical). Our results imply that there is something to gain by using the "right instrument" at the "right time".

scholarly journals Stability and Bifurcation of a Delayed Time-Fractional Order Business Cycle Model with a General Liquidity Preference Function and Investment Function

Mathematics ◽  
2019 ◽  
Vol 7 (9) ◽  
pp. 846 ◽  
Author(s):  
Yingkang Xie ◽  
Zhen Wang ◽  
Bo Meng
Keyword(s):  
Business Cycle ◽  
Fractional Order ◽  
Preference Function ◽  
Positive Equilibrium ◽  
Proposed Model ◽  
Investment Function ◽  
Business Cycle Model ◽  
The Business Cycle ◽  
Positive Equilibrium Point ◽  
Delayed Time

In this paper, the business cycle (BC) is described by a delayed time-fractional-order model (DTFOM) with a general liquidity preference function and an investment function. Firstly, the existence and uniqueness of the DTFOM solution are proven. Then, some conditions are presented to guarantee that the positive equilibrium point of DTFOM is locally stable. In addition, Hopf bifurcation is obtained by a new method, where the time delay is regarded as the bifurcation parameter. Finally, a numerical example of DTFOM is given to verify the effectiveness of the proposed model and methods.

scholarly journals Investment Dispersion and the Business Cycle

2014 ◽  
Vol 104 (4) ◽  
pp. 1392-1416 ◽  
Author(s):  
Rüdiger Bachmann ◽  
Christian Bayer
Keyword(s):  
Business Cycle ◽  
Adjustment Costs ◽  
Firm Risk ◽  
Firm Level ◽  
Cross Sectional ◽  
Capital Adjustment ◽  
Investment Rates ◽  
Business Cycle Model ◽  
The Business Cycle ◽  
Heterogeneous Firm

The cross-sectional dispersion of firm-level investment rates is procyclical. This makes investment rates different from productivity, output, and employment growth, which have countercyclical dispersions. A calibrated heterogeneous-firm business cycle model with nonconvex capital adjustment costs and countercyclical dispersion of firm-level productivity shocks replicates these facts and produces a correlation between investment dispersion and aggregate output of 0.53, close to 0.45 in the data. We find that small shocks to the dispersion of productivity, which in the model constitutes firm risk, suffice to generate the mildly procyclical investment dispersion in the data but do not produce serious business cycles. (JEL D42, D92, E32, G31, G32)

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