Chapter

The Old Trade Cycle

John Hicks

in A Market Theory of Money

Published in print August 1989 | ISBN: 9780198287247
Published online November 2003 | e-ISBN: 9780191596407 | DOI: http://dx.doi.org/10.1093/0198287240.003.0012
 The Old Trade Cycle

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This chapter discusses the old style of the financial cycle and its eventual demise. The work of Keynes was a turning-point between one epoch of economic thinking and another. That it was also associated with another turning-point, in what economists call the ‘real world’, has not been given sufficient attention. Keynes was writing during and just after the world economic crisis of 1929–34; this is background to what he writes about. At that time it was obvious to his readers that there was this association; not only his occasional pieces, to be collected as Essays in Persuasion, but also his major works, had a topical side to them. They reflected his perception of what was going on around him — the passage from one way of organizing economic affairs to what would have to be another. Other economists did not see it like that. They had their own idea of what was happening; they looked upon it as an example of a familiar type of disturbance which was called the trade cycle or business cycle. It was already many years since that had first been recognized.

Keywords: Keynes; Essays in Persuasion; economic theory; financial cycle; economic crisis

Chapter.  4448 words. 

Subjects: Macroeconomics and Monetary Economics

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