The Business Cycle in the Post-War World

The question on which the eight ‘Country Papers’ which have been circulated are intended to throw light can be put in some such way as this. For the last seven years the economic life of the countries of the western world has been dominated by two powerful sets of influences. First, there has been recovery from total war, relapse into partial war, preparation for possible resumption of total war. Secondly, there has been a persistent problem of imbalance between various sections of the western world. I must not at the moment attempt to probe into the nature of this latter problem, or the extent to which it has been aggravated or mitigated — perhaps both — by the first set of influences — that connected with past, present and possible war. My point is simply that between them these two sets of influences — those connected with war and with international imbalance — have moulded the actual course of events to a degree which makes it idle to suppose that the economic record of the past seven years can be written in any direct and simple way in terms of a theory of normal cyclical movement.