Business Cycles versus Boom-and-Bust Cycles

At the beginning of our discipline, economic crises were considered as disconnected and random events caused by exceptional and disparate contingencies and occurrences such as wars, political and social unrest, food shortage, natural disasters, and so on. Economists as well as bankers and businessmen soon started to realize that crises were much less isolated than it was generally thought, and that their recurrence was not random. Juglar (1857) was one of the first researchers to attempt to account for the recurrence of crises starting from statistical observation. Initially trained as a physician, the French economist is considered by Schumpeter (1954/1994: 1123) ‘as to talent and command of scientific method, among the greatest economists of all times’. Starting from a series of statistical data about banknotes circulation, bank deposits, discount, and metallic reserves for France, England, and the United States — which he correlates to the volume of commercial transactions, the price of corn, rent, public revenue, and variations in population — Juglar (1857, 1889) asserts that monetary and commercial crises are strictly interrelated and are the unavoidable price to be paid for the evolution of capitalism.