Editing Business cycle (section)

=== Classification by periods ===
[[File:The Forces of the Business Cycle, 1922.jpg|thumb|upright=1.2|Business cycle with it specific forces in four stages according to [[Malcolm C. Rorty]], 1922]]
In 1860 French economist [[Clément Juglar]] first identified economic cycles 7 to 11 years long, although he cautiously did not claim any rigid regularity.<ref>M. W. Lee, ''Economic fluctuations''. Homewood, IL, Richard D. Irwin, 1955</ref> This interval of periodicity is also commonplace, as an empirical finding, in time series models for stochastic cycles in economic data.  Furthermore, methods like statistical modelling in a Bayesian framework – see e.g. [Harvey, Trimbur, and van Dijk, 2007, ''Journal of Econometrics''] – can incorporate such a range explicitly by setting up priors that concentrate around say 6 to 12 years, such flexible knowledge about the frequency of business cycles can actually be included in their mathematical study, using a Bayesian statistical paradigm.<ref name="repub.eur.nl">{{cite journal |last1=Harvey |first1=Andrew C. |last2=Trimbur |first2=Thomas M. |last3=van Dijk |first3=Herman C. |year=2007 |title=Trends and cycles in economic time series: A Bayesian approach |url=http://repub.eur.nl/pub/6913 |journal=Journal of Econometrics |volume=140 |issue=2 |pages=618–649 |doi=10.1016/j.jeconom.2006.07.006 |hdl-access=free |hdl=1765/6913}}</ref>

Later{{when|date=January 2014}}, economist [[Joseph Schumpeter]] argued that a [[Juglar cycle]] has four stages:
# [[Economic expansion|Expansion]] (increase in production and prices, low interest rates)
# [[Economic crisis|Crisis]] (stock exchanges crash and multiple bankruptcies of firms occur)
# [[Recession]] (drops in prices and in output, high interest-rates)
# [[Economic recovery|Recovery]] (stocks recover because of the fall in prices and incomes)

Schumpeter's Juglar model associates recovery and prosperity with increases in productivity, [[consumer confidence]], [[aggregate demand]], and prices.

In the 20th century, Schumpeter and others proposed a typology of business cycles according to their periodicity, so that a number of particular cycles were named after their discoverers or proposers:<ref>
{{cite book |title=History of Economic Analysis |last=Schumpeter |first=J. A. |year=1954 |publisher=George Allen & Unwin |location=London }}</ref>
{{economic waves}}
* The [[Kitchin cycle|Kitchin inventory cycle]] of 3 to 5 years (after [[Joseph Kitchin]])<ref name="Kitchin">{{cite journal |last=Kitchin |first=Joseph |year=1923 |title=Cycles and Trends in Economic Factors |journal=[[Review of Economics and Statistics]] |volume=5 |issue=1 |pages=10–16 |doi=10.2307/1927031 |jstor=1927031 }}</ref>
* The Juglar [[fixed investment|fixed-investment]] cycle of 7 to 11 years. A range of periods rather than one fixed period is needed to capture business cycle fluctuations, which may be done by using a random or irregular source as in an econometric or statistical framework. 
* The [[Kuznets swing|Kuznets infrastructural investment cycle]] of 15 to 25 years (after [[Simon Kuznets]] – also called "building cycle")
* The [[Kondratiev wave]] or long technological cycle of 45 to 60 years (after the Soviet economist [[Nikolai Kondratiev]])<ref name="Kondratieff">{{cite journal |last1=Kondratieff |first1=N. D. |last2=Stolper|first2= W. F. |year=1935 |title=The Long Waves in Economic Life |journal=Review of Economics and Statistics |volume=17 |issue=6 |pages=105–115 |doi=10.2307/1928486 |jstor=1928486 }}</ref>

Some say interest in the different typologies of cycles has waned since the development of modern [[macroeconomics]], which gives little support to the idea of regular periodic cycles.<ref>{{cite web |url=http://www.albany.edu/~bd445/Eco_301/Slides/Business_Cycle_Notes_(Print).pdf|title=Business cycle notes |access-date=2014-09-22|url-status=dead |archive-url=https://web.archive.org/web/20140125054802/http://www.albany.edu/~bd445/Eco_301/Slides/Business_Cycle_Notes_%28Print%29.pdf |archive-date=2014-01-25}}</ref> Further econometric studies such as the two works in 2003 and 2007 cited above demonstrate a clear tendency for cyclical components in macroeconomic times to behave in a stochastic rather than deterministic way.

Others, such as [[Dmitry Orlov (writer)|Dmitry Orlov]], argue that simple compound interest mandates the cycling of monetary systems. Since 1960, World [[Gross domestic product|GDP]] has increased by fifty-nine times, and these multiples have not even kept up with annual inflation over the same period. [[Social Contract]] (freedoms and absence of social problems) collapses may be observed in nations where incomes are not kept in balance with cost-of-living over the timeline of the monetary system cycle.

The [[Bible]] (760 BCE) and [[Hammurabi]]'s Code (1763 BCE) both explain economic remediations for cyclic sixty-year recurring great depressions, via fiftieth-year [[Jubilee (biblical)]] debt and wealth resets{{citation needed|date=September 2019}}. Thirty major debt forgiveness events are recorded in history including the debt forgiveness given to most European nations in the 1930s to 1954.<ref>{{Cite news|url=https://www.telegraph.co.uk/finance/economics/11383374/The-biggest-debt-write-offs-in-the-history-of-the-world.html |archive-url=https://ghostarchive.org/archive/20220112/https://www.telegraph.co.uk/finance/economics/11383374/The-biggest-debt-write-offs-in-the-history-of-the-world.html |archive-date=2022-01-12 |url-access=subscription |url-status=live|title=The biggest debt forgiveness write-offs in the history of the world – Telegraph|last=Khan|first=Mejreen|website=Telegraph.co.uk|date=2 February 2015|language=en-US|access-date=2018-12-10}}{{cbignore}}</ref>