Friedrich A. Lutz’ Epistemological and Methodological Messages During the German-Language Business Cycle Debate

2019 ◽  
Vol 139 (1) ◽  
pp. 1-28
Author(s):  
Lachezar Grudev
Keyword(s):  
Business Cycle ◽  
Economic History ◽  
Necessary Conditions ◽  
German Language ◽  
Market Order ◽  
Habilitation Thesis ◽  
Specific Factors ◽  
The Subject ◽  
Historical Phenomenon ◽  
The Business Cycle

Friedrich A. Lutz’ 1932 habilitation thesis is considered the last highlight in a German-language business cycle debate that took place during the interwar period. This debate, initiated by Adolf Löwe, concentrated on the necessary conditions in defining a dynamic theory that should explain the business cycle understood as a dynamic disequilibrium phenomenon in a deductive way. This article contributes to Lutz scholarship by focusing on Lutz’ criticism of Clément Juglar’s “unconditional” observations. This constituted the basis for the problematic concept of wave-like fluctuation subsequently adopted by the Historical School and Joseph Schumpeter. I establish a relationship between Lutz’ criticism and his statement that this perspective does not find support in economic history. Lutz asserted that each crisis represents a unique historical phenomenon caused by specific factors whose impact on the economy depends on its institutional framework. From this, I derive an epistemological claim, namely that the equilibrium tendencies within the market order should be the subject of inquiry, and a methodological call, namely the development of models showing hypothetically what factors can disturb these tendencies. The paper contextualizes Lutz’ criticism and messages into the formation of the Freiburg School’s research program.

Model of a Regional Business Cycle Indicatorforthe Province of Warmia and Mazury

2012 ◽  
Vol 7 (2) ◽  
pp. 249-271
Author(s):  
Rafał Warżała
Keyword(s):  
Comparative Analysis ◽  
Business Cycle ◽  
National Level ◽  
Economic Data ◽  
Regional Basis ◽  
The Subject ◽  
The Business Cycle ◽  
The Individual ◽  
High Level ◽  
Cycle Indicator

Business cycle analysis at the national level does not have to be consistent with the economic situation of its individual regions. Diversity in the structure and development dynamics of the individual regions isalso reflected in the range of sensitivity to business cycle changes. Anevaluation was conducted of the suitability of multi-dimensional comparative analysis methods to evaluate the business cycle in the economy on a regional basis based on the example of Warmia and Mazury.The economy of Warmia and Mazury and its sensitivity to macroeconomic disturbances was the subject of the analysis. The business cycle studies by region conducted in Poland are based on so-called "business cycle tests" which are characterised by a high level of subjectivism. They are based on the results of questionnaire-based surveys conducted among entrepreneurs and, as a consequence, it seems justified to build a business cycle indicator for the province of Warmia and Mazury based on "hard" economic data. The proposal of the business cycle indicator for the region of Warmia and Mazury is based on the key economic dimensions for the region. The currently applied methods for elimination of irregular fluctuations and location of turning points were used for designing it. The outcome of the above measures offers the possibility to present the value of the current and prognostic business cycle indicator for Warmia and Mazury with monthly frequency. 

Walter Eucken’s Concept of Economic Order and Business Cycle Analysis

ORDO ◽  
2020 ◽  
Vol 71 (1) ◽  
pp. 17-46
Author(s):  
Lachezar Grudev
Keyword(s):  
Business Cycle ◽  
Economic Order ◽  
Economic Crises ◽  
Empirical Observation ◽  
Ideal Types ◽  
Exogenous Shocks ◽  
Theoretical Approaches ◽  
The Subject ◽  
The Business Cycle

Abstract Walter Eucken formulated his concept of economic order as a solution to the tension between theoretical approaches and empirical observation that had constituted the conflict between the Austrian School of Economics and the German Historical School. Previous literature has established the linkage between the German-language business cycle debate of the late 1920 s and Eucken’s concept of economic order. This paper discusses how his concept of economic order can help to understand the severity of economic crises and thus concentrates on the elements constituting the economic order, i. e. its ideal types, with whose help Eucken aimed to derive hypothetical propositions. Based on the writings of his students Leonhard Miksch and Friedrich A. Lutz who underscored the role of equilibrium in business cycle research, this paper suggests that abstract theory of economic crises should employ ideal types as models and thus study how exogenous shocks affect the endogenous economic variables. The subject of inquiry should be oriented to the process of equilibrium reestablishment. Crucial for this paper is that the equilibrium reestablishment depends on institutional factors. This method to explain economic crises represents the link which connects the business cycle debate of the 1920 s and 1930 s to the subsequent emergence of the ordoliberal theory of institutions and orders.

The Determinants of Trade Union Membership in Britain: A Survey of the Literature

ILR Review ◽  
1993 ◽  
Vol 46 (2) ◽  
pp. 332-351 ◽  
Author(s):  
Bob Mason ◽  
Peter Bain
Keyword(s):  
Literature Review ◽  
Business Cycle ◽  
Trade Union ◽  
Union Membership ◽  
Union Density ◽  
Full Time ◽  
Environmental Determinants ◽  
Union Growth ◽  
The Subject ◽  
The Business Cycle

Trade union density, defined as the number of union members divided by the total number of workers, fell in Britain from 55% in 1979 to about 41% in 1989. (By comparison, the corresponding U.S. figures for those years are 23% and 16%.) Even before the decline began, British scholars and practitioners began focusing increasing attention on the determinants of union growth and decline. This literature review traces debate on the subject in Britain to the work of George Bain and his colleagues starting in the mid-1970s, and examines several key contributions of more recent years. The authors differentiate “structuralist” studies, which emphasize environmental determinants of union membership (such as the business cycle), from “interventionist” studies, which place more emphasis on the influence of unions themselves (through the involvement of full-time officials in recruiting, for example).

The Capital-Using Economy

2015 ◽  
pp. 144-163
Author(s):  
Peter Lewin ◽  
Howard Baetjer
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Austrian Economics ◽  
Austrian School ◽  
Capital Theory ◽  
Austrian Capital Theory ◽  
Austrian Capital ◽  
The Subject ◽  
The Business Cycle ◽  
Main Ideas

Capital theory is fundamental to everything else in Austrian economics. It lies at its core, implicit in discussions of monetary policy, the business cycle, the entrepreneur, and the subjectivity of value and expectations. Prior to the Keynesian revolution, it was capital theory for which the Austrian school was most known among mainstream economists. With the advent of Keynesian macroeconomics, interest in capital theory all but disappeared. But it has recently been the subject of increasing attention. After a brief overview of the main ideas in Austrian capital theory (ACT) from its origins and extensions through the middle of the last century, this chapter notes this rekindled interest and surveys recent applications, including its connection to complexity studies, management studies, entrepreneurship, and macroeconomic policy.

scholarly journals Determinants of Aggregate Credit Flows to U.S. Corporate and Noncorporate Sector

SAGE Open ◽  
2019 ◽  
Vol 9 (1) ◽  
pp. 215824401882308
Author(s):  
P. Lakshmi ◽  
M. Thenmozhi ◽  
Nikhil Varaiya
Keyword(s):  
Business Cycle ◽  
Multivariate Regression ◽  
The United States ◽  
Capital Requirements ◽  
Short Term ◽  
Fund Flow ◽  
Specific Factors ◽  
The Business Cycle ◽  
Long Term Behavior

This article explores the financial accounts of the United States to analyze the synchronicity in bank and nonbank credit flows with the fund flow patterns of U.S. nonfinancial corporate and noncorporate sector. We differ from prior studies and examine the long-term behavior from 1952 to 2015 in relation to peaks and troughs in business cycle, sector-specific factors, and macroeconomic variations. We find that the nonbank credit flows have evolved as a significant source of credit for corporate and noncorporate sector and exhibit higher levels of synchronicity during the period after 1980. The high synchronicity of nonbank credit flows necessitates sufficient resilience in the business cycle upsurge through countercyclical actions, specifically in the noncorporate sector. Multivariate regression results reveal that noncorporate sector relies more on nonbank credit for short-term cash and working capital requirements, whereas corporate sector opts nonbank credit for long-term investments. We also find evidence of relatively higher inter-sectoral impact of business cycle shocks between corporate and noncorporate sector from 1980 to 2015.

Stock Returns and the Business Cycle

CFA Digest ◽  
2005 ◽  
Vol 35 (2) ◽  
pp. 42-43
Author(s):  
Daniel B. Cashion
Keyword(s):  
Business Cycle ◽  
Stock Returns ◽  
The Business Cycle

EXPANSIONS AND RECESSIONS IN THE MEXICAN STATES: A CLASSICAL BUSINESS CYCLES APPROACH

2017 ◽  
Vol 3 (5) ◽  
pp. 32
Author(s):  
Pablo Mejía-Reyes
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Monthly Basis ◽  
Production Index ◽  
Clear Cut ◽  
Output Measure ◽  
Central Regions ◽  
The Business Cycle ◽  
National Business ◽  
Cycle Indicator

This paper aims to document expansions and recessions characteristics for 17 states of Mexico over the period 1993-2006 by using a classical business cycle approach. We use the manufacturing production index for each state as the business cycle indicator since it is the only output measure available on a monthly basis. According to this approach, we analyse asymmetries in mean, volatility and duration as well as synchronisation over the business cycle regimes (expansions and recessions) for each case. Our results indicate that recessions are less persistent and more volatile (in general) than expansions in most Mexican states; yet, there is no clear cut evidence on mean asymmetries. In turn, there seems to be strong links between the business cycle regimes within the Northern and Central regions of the country and between states with similar industrialisation patterns, although it is difficult to claim that a national business cycle exists.

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