Editing Business cycle (section)

=== Theory ===
{{multiple image
|height = 160
|image1 = Business_cycle.jpg
|alt1 = Parts of a business cycle
|caption1 = Phases of the business cycle
|image2 = World_Business_Cycle.png
|alt2 = Actual business cycle
|caption2 = Long term growth of GDP
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The first systematic exposition of [[economic crises]], in opposition to the existing theory of [[economic equilibrium]], was the 1819 {{Lang|fr|Nouveaux Principes d'économie politique}} by [[Jean Charles Léonard de Sismondi]].<ref>[http://www.economictheories.org/2008/11/over-production-and-under-consumption.html "Over Production and Under Consumption"] {{webarchive|url=https://web.archive.org/web/20090425055556/http://www.economictheories.org/2008/11/over-production-and-under-consumption.html |date=2009-04-25 }}, ScarLett, History Of Economic Theory and Thought</ref> Prior to that point [[classical economics]] had either denied the existence of business cycles,<ref>{{Cite news|title=Economics in Crisis: Severe and Logical Contradictions of Classical, Keynesian, and Popular Trade Models |last=Batra |first=R. |year=2002}}</ref> blamed them on external factors, notably war,<ref>{{cite web |url=http://www.thefreemanonline.org/featured/classical-economists-good-or-bad/|title=Classical Economists, Good or Bad?|url-status=dead |archive-url=http://arquivo.pt/wayback/20091002020124/http://www.thefreemanonline.org/featured/classical-economists-good-or-bad/|archive-date=2009-10-02}}</ref> or only studied the long term. Sismondi found vindication in the [[Panic of 1825]], which was the first unarguably international economic crisis, occurring in peacetime.{{Citation needed|date=May 2019}}

Sismondi and his contemporary [[Robert Owen]], who expressed similar but less systematic thoughts in 1817 ''Report to the Committee of the Association for the Relief of the Manufacturing Poor,'' both identified the cause of economic cycles as [[overproduction]] and [[underconsumption]], caused in particular by [[wealth inequality]]. They advocated [[government intervention]] and [[socialism]], respectively, as the solution. This work did not generate interest among classical economists, though underconsumption theory developed as a heterodox branch in economics until being systematized in [[Keynesian economics]] in the 1930s.

Sismondi's theory of periodic crises was developed into a theory of alternating ''cycles'' by [[Charles Dunoyer]],<ref>{{cite journal | last1 = Benkemoune | first1 = Rabah | year = 2009 | title = Charles Dunoyer and the Emergence of the Idea of an Economic Cycle | journal = History of Political Economy | volume = 41 | issue = 2 | pages = 271–295 | doi = 10.1215/00182702-2009-003 }}</ref> and similar theories, showing signs of influence by Sismondi, were developed by [[Johann Karl Rodbertus]]. Periodic crises in capitalism formed the basis of the theory of [[Karl Marx]], who further claimed that these crises were increasing in severity and, on the basis of which, he predicted a [[communist revolution]].{{Citation needed|date=May 2021}} Though only passing references in ''[[Das Kapital]]'' (1867) refer to crises, they were extensively discussed in Marx's posthumously published books, particularly in ''[[Theories of Surplus Value]]''. In ''[[Progress and Poverty]]'' (1879), [[Henry George]] focused on [[land (economics)|land]]'s role in crises – particularly [[land speculation]] – and proposed a [[land value tax|single tax on land]] as a solution.

Statistical or econometric modelling and theory of business cycle movements can also be used. In this case a time series analysis is used to capture the regularities and the stochastic signals and noise in economic time series such as Real GDP or Investment.  [Harvey and Trimbur, 2003, ''Review of Economics and Statistics''] developed models for describing stochastic or pseudo- cycles, of which business cycles represent a leading case.  As well-formed and compact – and easy to implement – statistical methods may outperform macroeconomic approaches in numerous cases, they provide a solid alternative even for rather complex economic theory.<ref>{{cite journal|last1=Harvey|first1=Andrew C. |last2=Trimbur|first2=Thomas M.|year=2003|title=General model based filters for extracting trends and cycles in economic time series |journal=Review of Economics and Statistics|volume=85|issue=2|pages=244–255 |doi=10.1162/003465303765299774 |s2cid=57567527 |url=http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/wp0113.pdf }}</ref>