Business Cycles

When writing the preface the main work has been done. What remains is thanking all those people who directly or indirectly contributed to the out come. My thanks go to my family and friends for their encouragement towards the completion of this book. Among the academic profession, I would like to thank Prof. Dr. Dr. Harald Scherf, my academic teacher, first. During the years at Hamburg University I benefitted especially from his profound knowledge of Keynesian theory. His way of examining an argument in an unbiased way helped me a lot to carry out the reseach I wanted to do. His confidence enabled me to finish the work. A part of the book was written while I was a visiting fellow at DELTA, Paris, where I am particularly indebted to Roger Guesnerie. I have benefitted from his encouragement, advice, and gentle criticism during discussions and seminars, especially on the topic of the time structure of economic dynamics. I would like to acknowledge the hospitality and stimulating atmosphere at DELTA. Different versions of the manuscript, or parts of it have been read by Prof. Dr. Manfred Holler, Dr. Jorg Bibow and Dr. Gabriele Kasten. Their comments and suggestions were quite helpul and are gratefully acknowledged. Additionally, I have to thank Prof. Dr. M. Funke and Prof. Dr. V. Timmer mann.

Klappentext

The confidence in the market mechanisms for clearing all markets splits the economic profession. In this book, not only the existing business cycle literature is examined within the framework of economic stability, but also the market structure and the interaction of markets are analysed in their impact on the business cycle. Nominal rigidities are shown to exist in the cases of monopoly, monopolistic competition with menu costs. For the case of oligopoly, a new approach is presented. Endogenous cycles are derived for a monopoly model. The interaction of a consumption goods sector and an investment goods sector is dealt with. Substitution between labour and capital with the sector and between the two sectors are identified as the main economic reasons for economic fluctuations. Emphasis is laid on the economic interpretation of the mostly mathematical analysis of optimal growth and overlapping-generations models and a new approach of partial equilibrium.

Inhalt

1. Introduction.- 2. Basic questions, early theories and empircal evidence.- 2.1 What is business cycle theory about?.- 2.2 A brief sketch of early theories.- 2.3 Stylized facts.- 3. Stability of the economy.- 3.1 Introduction.- 3.2 Stability of steady state equilibria.- 3.3 Structural stability of a dynamical system.- 4. Survey of modern business cycle theory.- 4.1 Introduction.- 4.2 Business cycles in a stable economic system.- 4.3 Business cycles in an unstable economic system.- 5. Market structure.- 5.1 Introduction.- 5.2 The static case.- 5.3 The dynamic case.- 5.4 Relation to the literature.- 6. Market interaction.- 6.1 Introduction.- 6.2 General equilibrium.- 6.3 Partial equilibrium.- 6.4 Relation to the literature.- 7. Conclusion.- A. Proofs of the theorems of section 5.2.- B. The existence of k-SSE.