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Building blocks of a heterodox business cycle theory

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  • Robert Calvert Jump
  • Engelbert Stockhammer

Abstract

A key characteristic of heterodox theories of the business cycle is their focus on endogenous business cycle mechanisms. This paper provides an overview and comparison of four models in heterodox business cycle theory: multiplier-accelerator models, Goodwin models, Minskyan debt-cycle models, and momentum trader models. A representative model from each theory is formulated as a two-dimensional predator-prey system in continuous time, which allows us to identify the different stabilizing and destabilizing mechanisms. We argue that the theories are substantially competing, as they posit different mechanisms that explain cycles, but we also argue that these mechanisms are not mutually exclusive. We suggest that heterodox economists work toward a synthesis.

Suggested Citation

  • Robert Calvert Jump & Engelbert Stockhammer, 2023. "Building blocks of a heterodox business cycle theory," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 46(2), pages 334-358, April.
    • Handle: RePEc:mes:postke:v:46:y:2023:i:2:p:334-358
    DOI: 10.1080/01603477.2023.2167093
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    Cited by:

    1. Mark Setterfield & George Wheaton, 2026. "Animal Spirits and the Goodwin Pattern," Metroeconomica, Wiley Blackwell, vol. 77(1), pages 2-16, February.
    2. Laura Porak & Rouven Reinke, 2024. "The contribution of qualitative methods to economic research in an era of polycrisis," Review of Evolutionary Political Economy, Springer, vol. 5(1), pages 31-49, June.
    3. Simon Schairer, 2024. "The contradictions of unconventional monetary policy as a post-2008 thwarting mechanism: financial dominance, shadow banking, and inequality," Review of Evolutionary Political Economy, Springer, vol. 5(1), pages 1-29, June.

    More about this item

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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