Trade Cycles
Wesley C. Mitchell, a noted American authority 011 business cycles, wrote: “Business cycles are a species of fluctuations in the economic activities of organised communities.” The adjective ,’business’ restricts the concept to fluctuations in the activities, which are systematically conducted on commercial basis. The noun ‘cycles’ bars out fluctuations, which do not recur with a measure of regularity. Mitchell has, thus, described all the important features of a business cycle admirably. According to him, features of trade cycle are:
- It occurs only in organised communities, which are
money economies.
- Refers to fluctuations or changes in business
conditions.
- Implies regular and periodical changes in business and
economic activities.
According to Keynes, “A trade cycle is composed of periods of good trade characterised by rising prices and low unemployment percentage, alternating with periods of bad trade characterised by falling prices and high unemployment percentage. “
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