The Time-to-Build Tradition in Business Cycle Modelling
AbstractAn important frontier of business cycle theorising is the 'time-to-build' tradition that lies at the heart of Real Business Cycle theory. Kydland and Prescott (1982) did not acknowledge the rich tradition of 'time-to-build' business cycle theorising - except in a passing, non-scholarly, non-specific, reference to Böhm-Bawerk's classic on Capital Theory (Böhm-Bawerk ), which did not, in any case, address cycle theoretic issues. The notion of ‘time-to-build’ is intrinsic to any process oriented production theory which is incorporated in a macrodynamic model. We provide an overview of this tradition, focusing on some of the central business cycle classics, and suggest that the Neo-Austrian revival should be placed in this class of dynamic macroeconomics, albeit ‘traverse dynamics’ is itself to be considered as a fluctuating path from one equilibrium to another.
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Bibliographic InfoPaper provided by ASSRU - Algorithmic Social Science Research Unit in its series ASSRU Discussion Papers with number 1109.
Date of creation: 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-04 (All new papers)
- NEP-BEC-2011-06-04 (Business Economics)
- NEP-DGE-2011-06-04 (Dynamic General Equilibrium)
- NEP-HPE-2011-06-04 (History & Philosophy of Economics)
- NEP-MAC-2011-06-04 (Macroeconomics)
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