The Business Cycle

The Business cycle involves many components that include past and present theories and models put forth by economists throughout history. This book summarizes the extent of the components which make up the subject. The book is divided into six parts: Part I defines the business cycle through theoretical and historical perspectives. It addresses business cycle theory, Keynesian theory, credit/debt cycles, Austrian theory, liquidity, illiquidity, and solvency. Part II continues with business cycle theory, Lutz and the equilibrium theory, Austrian business cycle theory, money, credit, and loan cycles, micro-economic fluctuations, trade and inequality, case studies, and wealth inequality. Part III addresses business cycle mechanics in the form of financial cycles, asymmetric business cycles, noninflationary demand driven cycles, perception driven fluctuations, a new Keynesian model before moving into behavioral economics. Part IV begins discussion of behavioral economics and animal spirits, including behavioral finance, economic reasoning in non human animals, animal spirits and the optimal level of the inflationary target, credit cycles, and animal spirit derived business cycles. Part V presents business cycle amendments in the form of investment, asset class performance, merits of business cycle approach, and deciphering the liquidity and credit crunch. Finally, Part VI discusses fiscal outlook in the form of macro-economical challenges, liquidity risk management, the role of monetary and fiscal policy, and fiscal policy in a depressed economy.