business-cycles

business-cycles - Business Cycles Sandeep Bhaskar Temple...

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Unformatted text preview: Business Cycles Sandeep Bhaskar Temple University Sandeep Bhaskar (Temple University) Business Cycles 1 / 15 Outline 1 Introduction 2 Theories Based on Aggregate Demand 3 Real Business Cycle Theory Sandeep Bhaskar (Temple University) Business Cycles 2 / 15 Introduction Business Cycle A business cycle is an irregular and non-repeating up-and-down movement of business activity that takes place around a generally rising trend. It is irregular and is therefore difficult to predict. It is non-repeating and therefore no two business cycles are identical. Expansions are usually stronger and tend to last longer than recessions. Sandeep Bhaskar (Temple University) Business Cycles 3 / 15 Introduction Explaining Business Cycles: Common Theme All business cycle theories have one common feature: investment and accumulation of capital determine business cycles. Expansions begin when investment in new capital speeds up. Recessions begin when investment in new capital slows down. Sandeep Bhaskar (Temple University) Business Cycles 4 / 15 Introduction Explaining Business Cycles: Difference Investment plays a central role in all explanations of business cycles. The difference arises in how do these changes come about. Based on this difference we have two broad categories of business cycle theories: Theories based on changes in aggregate demand....
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business-cycles - Business Cycles Sandeep Bhaskar Temple...

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