Cardinalism pp 223-232 | Cite as

A Cardinal Utility Approach to the Theory of the Business Cycle

Part of the Theory and Decision Library book series (TDLA, volume 19)


We use a cardinal utility approach to depict the influence of a business climate on individual producers of investment and consumption goods. Generated by the total of producers, this climate alters its strength and direction in the course of time thus modifying the behaviour of each producer. Cumulative effects, errors of optimism and pessimism, and disproportions of investment goods and consumption goods production may occur. Assuming reasonable values for the parameters, we obtain an asymptotically and structurally stable business cycle.


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© Springer Science+Business Media Dordrecht 1994

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