Abstract
The purpose of this chapter is to examine the debate over the cause and control of business cycles. At the centre of the debate lie a number of fundamental questions, most notably:
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Is the economy inherently stable?
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What is the main source of shocks that affect the economy?
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How long does it take for the economy to self-equilibrate once subjected to a shock?
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Can the authorities intervene to reduce fluctuations in economic activity?
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Further reading
Morgan, B. and J. R. Shackleton ‘The ups and downs of business cycle theory’ in Shackleton, J. R. (ed.) New Thinking in Economics (Aldershot: Edward Elgar, 1990). Provides a deftly written survey of business cycle theory.
Friedman, M. The Counter-Revolution in Monetary Theory (London: Institute of Economic Affairs, 1970). An accessible non-technical discussion, which places the monetarist counterrevolution in historical perspective, and describes the central propositions of monetarism.
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© 1999 Chris Mulhearn and Howard R. Vane
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Mulhearn, C., Vane, H.R. (1999). Business Cycles: Causes and Control. In: Economics. Macmillan Foundations. Palgrave, London. https://doi.org/10.1007/978-1-349-14437-2_13
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DOI: https://doi.org/10.1007/978-1-349-14437-2_13
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-69183-0
Online ISBN: 978-1-349-14437-2
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