🚀 go-pugleaf

In article <thompson.714931542@daphne.socsci.umn.edu>, thompson@atlas.socsci.umn.edu    writes...
>garrett@Ingres.COM (QUOTE OF THE YEAR) writes:
> 
>[stuff from previous posts deleted]
> 
>The "business cycle" is not a theory but rather is the phenomena
>itself.  That is, it is the observation that (for at least the past
>200 years) the level of economic activity tends to oscillate at
>irregular intervals around a (generally upward) long-run trend.
>Different macroeconomic variables oscillate differently, but the
>evidence that some kind of cyclical behavior exists is very strong.
> 
>_Why_ business cycles happen is perhaps the biggest open question in
>economics today, and has been since at least the turn of the century.
>No professional economist of whom I am aware considers the question of
>causality for business cycles to be a closed topic.  This is an area
>of great controversy and very active research within the profession,
>so it should come as no surprise that there is so much controversy and
>confusion about it among the general population.  The available data
>are inconclusive enough to support many opposing viewpoints.
>
I don't doubt for a second that the economy oscillates. All I'm saying is
that I don't think it should be a phenomena. There are reasons, and if
there wasn't so much emotionism and politicism wrapped up in economics
we could probably figure out why it oscillates, and how we can smooth
out jumps and dips. To just accept it, I think is a mistake.

>>	All these theories, and yet not a single person saw a 
>>correlation between the tax cuts and the following recessions. Amazing.

>Unfortunately, correlation does not imply causality.  Furthermore, the
>more complex the system under study, the less likely it is that
>correlation provides evidence either for or against causality.
> 
Agreed. But if the same thing happens almost every time you do something
then eventually someone is going to see a direct correlation. Unfortunantly,
I think it will be a historian researching the "late, great America."

>Food for another thread: I have said here and in another post that the
>evidence for/against various theories of the business cycle is fairly
>weak.  However, I remember once seeing a graph that suggested that the
>amplitude of the cycles has on average been much lower since the end
>of WW II than before.  The speaker who presented this graph
>interpreted it as evidence that economists and policy makers had in
>fact learned something about business cycles since the turn of the
>century.  Comments?
> 
I think it has to do with the size of the economy. Details will have 
to be put forth by someone else though. I'm not educated in economics
enough to speculate more.

>T. Scott Thompson              email:  thompson@atlas.socsci.umn.edu

-Garrett