Editing Joseph Schumpeter (section)

===Business cycles===
Schumpeter's relationships with the ideas of other economists were quite complex in his most important contributions to economic analysis – the theory of [[business cycle]]s and development. Following neither Walras nor Keynes, Schumpeter starts in ''The Theory of Economic Development<ref>Schumpeter, J.A. ''The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle'' translated from the German by Redvers Opie (1961) New York: OUP</ref>'' with a treatise of [[circular flow]] which, excluding any innovations and innovative activities, leads to a stationary state.<ref>{{cite web |title=Schumpeter, Joseph-1883-1950 |url= https://www.libertarianism.org/topics/schumpeter-joseph-1883-1950}}</ref> The stationary state is, according to Schumpeter, described by [[Walrasian equilibrium]]. The hero of his story is the entrepreneur.

The entrepreneur disturbs this equilibrium and is the prime cause of economic development, which proceeds cyclically along with several time scales. In fashioning this theory connecting innovations, cycles, and development, Schumpeter kept alive the Russian [[Nikolai Kondratiev]]'s ideas on 50-year cycles, [[Kondratiev wave]]s.

Schumpeter suggested a model in which the four main cycles, [[Kondratiev wave|Kondratiev]] (54 years), [[Kuznets swing|Kuznets]] (18 years), [[Juglar cycle|Juglar]] (9 years), and [[Kitchin cycle|Kitchin]] (about 4 years) can be added together to form a composite [[waveform]]. A Kondratiev wave could consist of three lower-degree Kuznets waves.<ref>Recent research suggests that the Kuznets swing could be regarded as the third [[harmonic]] of the [[Kondratiev wave]] – see {{cite journal |last1=Korotayev |first1=Andrey V. |author-link=Andrey Korotayev |last2=Tsirel |first2=Sergey V. |title=A Spectral Analysis of World GDP Dynamics: Kondratieff Waves, Kuznets Swings, Juglar and Kitchin Cycles in Global Economic Development, and the 2008–2009 Economic Crisis |journal=Structure and Dynamics |date=7 January 2010 |volume=4 |issue=1 |doi=10.5070/SD941003306 |url= http://www.escholarship.org/uc/item/9jv108xp |access-date=25 June 2022|doi-access=free }}</ref> Each Kuznets wave could, itself, be made up of two Juglar waves. Similarly two (or three) Kitchin waves could form a higher degree Juglar wave. If each of these were in phase; more importantly, if the downward arc of each was simultaneous so that the [[nadir]] of each was coincident, it would explain disastrous slumps and consequent depressions. As far as the segmentation of the Kondratiev Wave, Schumpeter never proposed such a fixed model. He saw these cycles varying in time – although in a tight time frame by coincidence – and for each to serve a specific purpose.

{{Economic Waves}}