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A theory of economic cycles

Author

Listed:
  • Imre Dobos

    (Department of Economic Sciences, Budapest University of Technology and Economics, Budapest)

  • István Ábel

    (Institute of Finance and Accountancy, Budapest Business School, Budapest)

Abstract

The theory of economic motion was András Bródy’s main interest. This paper presents a simplified framework of Bródy’s economics. His multi-sector production and price theory is based on the Marxian theory of value reinterpreted by using measurement considerations. Economic motion in this framework is driven by technology represented by the internal proportions of production, not by external shocks. Prices and proportions jointly determine the economic structure and its motion (duality of prices and volumes). We derive the laws of motion of production and use of goods (consumption and accumulation) based on technological accounting balances. These laws determine a cyclical pattern. Using numerical examples we demonstrate how external changes in technology and valuations are propagated in changing the cyclical pattern of motion.

Suggested Citation

  • Imre Dobos & István Ábel, 2018. "A theory of economic cycles," Society and Economy, Akadémiai Kiadó, Hungary, vol. 40(2), pages 169-184, June.
    • Handle: RePEc:aka:soceco:v:40:y:2018:i:2:p:169-184
    Note: Imre Dobos thanks the support of the Gambrinus Fellowship Programme of the TU Dortmund University, Germany. István Ábel is grateful for the support from the MTA-BGE Macroeconomic sustainability working group funded by the Office of Sponsored Working Groups of the Hungarian Academy of Sciences.
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    More about this item

    Keywords

    dynamic Leontief model; Bródy’s model; economic growth; equilibrium; economic cycles;
    All these keywords.

    JEL classification:

    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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