The Business Cycle in the Post-War World: Proceedings of a Conference held by the International Economic Association

371 Pages·1955·35.822 MB·English

by  Erik Lundberg (eds.)

INTERNATIONAL ECONOMIC ASSOCIATION
CONFERENCE VOLUMES, Numbers 1-50
NUMBER 2
The Business Cycle in the
Post-War World
THE BUSINESS CYCLE
IN THE POST-WAR
WORLD
Proceedings of a Conference
held by the International Economic Association
EDITED BY
ERIK LUNDBERG
ASSISTED BY
A. D. KNOX
M
. .
S
TOCKTON
P R E S S
© International Economic Association 1955
Softcover reprint of the hardcover 1st edition 1955 978-0-333-40629-8
All rights reserved. No reproduction, copy or transmission
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or transmitted save with written permission or in accordance
with the provisions of the Copyright Act 1956 (as amended).
Any person who does any unauthorised act in relation to
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civil claims for damages.
First published 1955
This 50-volume set reprinted 1986 jointly by
THE MACMILLAN PRESS LTD
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and London
Companies and representatives
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and
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Published in the United States and Canada by
STOCKTON PRESS
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50-volume set ISBN 978-0-333-40626-7
ISBN 978-1-349-08439-5 ISBN 978-1-349-08437-1 (eBook)
DOI 10.1007/978-1-349-08437-1
CONTENTS
PAGE
INTRODUCTION. Erik Lundberg IX
PART I
THE BUSINESS CYCLE IN THE
POST-WAR WORLD
THE BusiNESS CYCLE IN THE PosT-WAR WoRLD: An Introductory
Note. D. H. Robertson 3
PosT-WAR EcoNOMIC TENDENCIES IN THE UNITED STATES. W.
Fellner 11
INDUSTRIAL FLUCTUATIONS IN THE UNITED KINGDOM, 1946-52.
E. A. G. Robinson 37
BUSINESS CYCLE EXPERIENCES IN SWEDEN, WITH SPECIAL REFERENCE
TO EcoNOMIC PoLICY IssuEs. E. Lundberg 55
A STUDY oF PosT-WAR INDUSTRIAL FLucTUATIONS IN DENMARK ..
J. Pedersen 78
BusiNESS CYCLES IN PosT-WAR FRANCE. A. Piatier 100
ANALYSIS OF ECONOMIC DEVELOPMENTS IN WESTERN GERMANY
SINCE THE CURRENCY REFORM OF 1948. E. Preiser and
W. Krelle 122
BusiNESS FLUCTUATIONS IN THE ITALIAN EcoNOMY. P. Saraceno 155
BusiNESS CYcLEs IN PosT-WAR }APAN. S. Tsuru 178
PART II
RECENT TRENDS OF
BUSINESS CYCLE THEORY
A MoDEL oF CYCLICAL GROWTH. R. M. Goodwin 203
STATISTICAL TESTING OF BusiNEss CYCLE THEORY: THE EcoNo-
METRIC METHOD. L. R. Klein 222
v
The Business Cycle in the Post-war World
PAGR
THE PosT-WAR INTERNATIONAL CYCLE. J. J. Polak 246
A NoTE oN THE INTERNATIONAL IMPACT oF CYCLICAL MovEMENTS.
N. Kaldor 266
INVESTMENT OPPORTUNITIES IN THE UNITED STATES BEFORE AND
AFTER WoRLD WAR II. R. A. Gordon 283
PART Ill
REPORT ON THE PROCEEDINGS
SUMMARY RECORD OF THE DEBATE. A. D. Knox 315
INDEX 357
vi
THE INTERNATIONAL ECONOMIC ASSOCIATION
President. G. Haberler
Vice-President L. Dupriez
Treasurer E. A. G. Robinson
Secretary H. Berger Lieser
PROGRAMME COMMITTEE
FOR THE CONFERENCE ON BUSINESS CYCLES
E. Lundberg
(Chairman)
G. Haberler E. A. G. Robinson
R. F. Harrod J. Tinbergen
A. Piatier
RAPPORTEUR
E. Lundberg
assisted by
A. D. Knox and E. Henderson
Vll
PARTICIPANTS IN THE CONFERENCE
R. Barre (France) L. R. Klein (U.S.)
D. G. Champernowne (U.K.) A. D. Knox (U.K.)
P. Dieterlen (France) E. Lundberg (Sweden)
L. Dupriez (Belgium) V. Marrama (Italy)
W. Fellner (U.S.) J. Pedersen (Denmark)
R. M. Goodwin (U.K.) A. Piatier (France)
R. A. Gordon (U.S.) J. J. Polak (Holland)
T. Haavelmo (Norway) E. Preiser (Germany)
G. Haberler (U.S.) D. H. Robertson (U.K.)
J. R. Hicks (U.K.) E. A. G. Robinson (U.K.)
C. Iversen (Denmark) J. Rueff (France)
P. W. Johr (Switzerland) P. Saraceno (Italy)
N. Kaldor (U.K.) M. Toyosaki (Japan)
S. Tsuru (Japan)
viii
INTRODUCTION
Bv ERIK LUNDBERG
IT is difficult to say how far the papers presented at the Oxford
Conference in September 1952 give a representative picture of the
present position of business cycle research. To describe a number
of economists, their papers and contributions to discussion as
representative has no very precise meaning. There are a great
number of economists all over the world working on business-cycle
problems with widely diverging methods of approach. There is
the further complication that this particular subject of research
varies from country to country, and changes with the economist at
the same time as the economist (qua economist) changes with it.
In such a flux of mind and matter the statement that our proceed
ings were representative certainly cannot be proved by some kind
of significance test. It is, however, a statement that I should like
to make, and that can be defended.
I should like to distinguish four main types of business cycle
research, all of which were represented at the Oxford Conference.
There were, in Oxford, economists working in various kinds of
research institutes with current and historical material. In most
cases they do not simply write chronicles of economic events ;
they try to arrange the records of economic development according
to their ideas as to the significance of the various facts. Theories
about strategic relations help them to find out which facts and
which relations are important and which are not. The econo
metricians - the second type of cycle research represented - have
more ambitious aims. They use the methods of mathematical
statistics to find out and measure systematic relations between
statistical series ; they also have preconceptions of strategic relations,
but they try to test the theories and give quantitative precision
to the parameters of the equations. The third group of business
cycle analysts is that of the mathematical model builders. Their
aim is to concentrate the analysis on a limited number of strategic
variables and relations, and by means of a closed system of equations
study the exact implications of the assumptions. Their models
aim at giving the essential features of the business cycle, but the
radical simplifications and the abstract assumptions tend to exclude
statistical testing. Finally, there were representatives of the fourth
lX
The Business Cycle in the Post-war World
group, embracing what is sometimes called the 'literary school' of
theoretical economists. They do not aim at precise mathematical
models. They tend to prefer an open system that gives them the
possibility of adding to their account of the cycle bits of evidence,
exogenous factors and new relations. Their explanation will not
be 'precise' as is the mathematical or econometric model, but more
flexible and with more room for intuition, with regard, for instance,
to the variability of the relations. The literary vagueness of this
type of theory is a consequence of its approach.
To my mind, one of the remarkable results of the discussions
at Oxford was that the representatives of these various types of
analysis did not regard their own method of approach as the only
right one. I think that this is brought out in the summary of the
discussion and also in the papers. There was no real Methoden
streit at the Conference. This is, of course, partly explained by
the fact that there are no very clear lines of demarcation between
these approaches. It is easy to find examples of mixtures of
methods showing that one way of explanation does not exclude the
use of others. Our problems are so complicated, so many aspects
must be taken care of, that we must try to get more understanding,
not by a single method but by all available methods. The atmo
sphere of tolerance that ruled at the Conference, despite the very
diverse training (and also differing political views) of the economists
present, was - I am sure - mainly determined by considerations
and experiences of this kind. It should not be forgotten, however,
that although the prospects of achieving efficient co-operation
between the various lines of research may be good, there is at
present, in fact, far too much isolation. In this respect the Con
ference cannot perhaps be regarded as fully representative. The
choice of participants by the organizing committee was not com
pletely random. We were successful in having a group of reason
able men who realized the limitations of their methods and the
hypothetical character of the results of their research.
It is not my intention to summarize what I might regard as the
main outcome of the Conference. That would be too ambitious a
task. This volume must not be bigger than one that can and should
be read. Neither would I wish to give my own personal views on
what I regard as the essential aims of business cycle theory and
the most promising lines of research. That would be a misuse of
the space given to me. In order to give some guidance to the
reader, I shall, in this introduction, try to mark out some important
issues to which the discussion often came back, and which are
implicitly or explicitly taken up in many of the papers. I shall do
X