IDEAS home Printed from https://ideas.repec.org/a/mul/jb33yl/doi10.1428-36746y2012i1p45-80.html
   My bibliography  Save this article

Origins and Early Development of the Nonlinear Endogenous Mathematical Theory of the Business Cycle

Author

Listed:
  • Venkatachalam Ragupathy
  • Kumaraswamy Vela Velupillai

Abstract

We study the origins of the nonlinear, endogenous, theory of the business cycle, in mathematical modes, within the framework of a macroeconomic theory, which was itself going through its own formal "birth pangs" at the same time, in the same years. The first part of the story begins in 1928 and ends, with the publication of Yasui's classic on Kaldor, Hicks and Goodwin, in 1953, and Hudson's classic of 1957. But there were other classics in the 1930s, even within some theories of the business cycles of the time - particularly the Austrian and that which may now be called the "time-to-build" tradition, which originates in Marx and Aftalion, independently, and reaches its nonlinear formalization origins in Tinbergen's work of 1931, followed by Kalecki's theories of the business cycle, substantially influenced also by Tinbergen's classic for mathematical method. There is also what may, for want of a better name, be called the "cobweb" tradition, on the one hand, and the tradition of Swedish Sequence Analysis, on the other (especially in the 1937 classic work of Lundberg, summarising the Swedish discussion on business cycle theory). The former having its origins, partly, in Austrian inspired search for an integration of dynamic method with equilibrium economic theory (especially represented by a series of classics by Rosenstein Rodan, from about 1929); and partly in the well known phenomenon of lagged responses in the supplydemand interactions in agricultural and commodity markets, particularly elegantly formalised by Leontief in 1934. From the point of view of economic theory, they were all part of the emerging consensus on the need to incorporate money and fluctuations in non-trivial ways as intrinsic components of orthodox equilibrium economic theory which was characterised as static theory. The implication was that the search was for a synthesis of dynamic method with traditional static equilibrium economic theory. The origins of macroeconomic theory, generally attributed to the post-depression development of monetary theory, business cycle theory and the theory of policy, could be traced to this particular search for a synthesis and was brilliantly summarised by Kuznets in a series of pioneering contributions in 1929-30. The story we try to tell is of mathematical business cycle theory in its non-linear modes, and how it emerged from one strand of macroeconomic theory, which, as just mentioned, was itself being forged, ab initio, dynamically.

Suggested Citation

  • Venkatachalam Ragupathy & Kumaraswamy Vela Velupillai, 2012. "Origins and Early Development of the Nonlinear Endogenous Mathematical Theory of the Business Cycle," Economia politica, Società editrice il Mulino, issue 1, pages 45-80.
  • Handle: RePEc:mul:jb33yl:doi:10.1428/36746:y:2012:i:1:p:45-80
    as

    Download full text from publisher

    File URL: https://www.rivisteweb.it/download/article/10.1428/36746
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.rivisteweb.it/doi/10.1428/36746
    Download Restriction: no

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. K.Vela Velupillai, 2012. "The Epistemology of Simulation, Computation and Dynamics in Economics," ASSRU Discussion Papers 1218, ASSRU - Algorithmic Social Science Research Unit.

    More about this item

    Keywords

    J.E.L.: B22; B23; C18; E32;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mul:jb33yl:doi:10.1428/36746:y:2012:i:1:p:45-80. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: https://www.rivisteweb.it/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.