scholarly journals NEW PERSPECTIVES ON HENRY LUDWELL MOORE’S USE OF HARMONIC ANALYSIS

Author(s):  
Paul Turner ◽  
Justine Wood

This paper reconsiders the contribution of Henry Ludwell Moore to dynamic economics through the use of harmonic analysis. We show that Moore’s analysis is innovative in its use of the Fourier transformation for the identification of cycles with different periodicities. This enables Moore to identify cycles of longer length with more precision than would be the case for the standard methodology. We are able to replicate the main features of his results and confirm the existence of a rainfall cycle with a periodicity similar to that of the business cycle (eight years). However, we find that the evidence for a longer (thirty-three-year) rainfall cycle is weaker than Moore indicates. We also argue that a central theme of Moore’s analysis—the relationship among rainfall, agricultural productivity, and the business cycle—marks an early precursor of the “real business cycle” approach. George Stigler’s (1962) dismissal of Moore’s work on cycles as “a complete failure” is therefore, in our opinion, unfair. Instead, we argue that, although his work is certainly flawed, it nevertheless deserves a place in both the history of business cycle theory and empirical economics.

2021 ◽  
Author(s):  
Paul Turner ◽  
Justine Wood

This paper reconsiders the contribution of Henry Ludwell Moore to dynamic economics through the use of harmonic analysis. We show that Moore’s analysis is innovative in its use of the Fourier transformation for the identification of cycles with different periodicities. This enables Moore to identify cycles of longer length with more precision than would be the case for the standard methodology. We are able to replicate the main features of his results and confirm the existence of a rainfall cycle with a periodicity similar to that of the business cycle (eight years). However, we find that the evidence for a longer (thirty-three year) rainfall cycle is weaker than Moore indicates. We also argue that a central theme of Moore’s analysis, the relationship between rainfall, agricultural productivity and the business cycle, marks an early precursor of the ‘Real Business Cycle’ approach. Stigler’s (1962) dismissal of Moore’s work on cycles as ‘a complete failure’ is therefore, in our opinion rather unfair. Instead, we argue that, although his work is certainly flawed, it nevertheless deserves a place in both the history of business cycle theory and empirical economics.


2018 ◽  
Vol 21 (2) ◽  
pp. 97-113
Author(s):  
Brian P. Simpson

Abstract Shawn Ritenour provides a review of my two-volume book titled Money, Banking, and the Business Cycle in the winter 2016 issue of The Quarterly Journal of Austrian Economics. This paper constitutes a response to some of the criticisms of the book in his review. In this response, I discuss topics such as the nature of profits, the sustainability of changes in time preference, the role of changes in prices versus changes in spending in the business cycle, the relationship between interest rates and the rate of profit, the nature of fraud, and the nature of value. I also discuss whether the structure of production can be measured using the average period of production. I address other issues raised by Ritenour as well. This discussion sheds light on Austrian business cycle theory and the nature of the business cycle.


1989 ◽  
Vol 3 (3) ◽  
pp. 79-90 ◽  
Author(s):  
N. Gregory Mankiw

Real business cycle theory is the latest incarnation of the classical view of economic fluctuations. It assumes that there are large random fluctuations in the rate of technological change. In response to these fluctuations, individuals rationally alter their levels of labor supply and consumption. The business cycle is, according to this theory, the natural and efficient response of the economy to changes in the available production technology. In this essay, I appraise this newly revived approach to the business cycle. In my view, real business cycle theory does not provide an empirically plausible explanation of economic fluctuations. Both its reliance on large technological disturbances as the primary source of economic fluctuations and its reliance on the intertemporal substitution of leisure to explain changes in employment are fundamental weaknesses. Moreover, to the extent that it trivializes the social cost of observed fluctuations, real business cycle theory is potentially dangerous. The danger is that those who advise policymakers might attempt to use it to evaluate the effects of alternative macroeconomic policies or to conclude that macroeconomic policies are unnecessary.


Author(s):  
Remigius Onwumere ◽  
Roy Stewart ◽  
Su Yu

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">As the business cycle fluctuates, the U.S. economy may face increased unemployment in the case of an economic downturn or increased inflation in the stage of an expansion. Therefore, the study of business cycles is important in determining the current and future condition of the economy as a whole. This study seeks to expand the current body of knowledge of the business cycle by combining the history of economic theory of &ldquo;Veblen&rdquo;, &ldquo;Marx&rdquo;, &ldquo;Schumpterer&rdquo;, &ldquo;Friedman&rdquo;, &ldquo;Keynes&rdquo;, &ldquo;Minsky&rdquo;, and &ldquo;Sherman&rdquo; with the diffusion index popularized by &ldquo;Valentine and Dauten&rdquo; (1983). The purpose of this study are two-folds: first is to review the theoretical framework of the history of economic thoughts of business cycle and the methodology of diffusion index; second is to use these economic theories and the technique of diffusion index<span style="mso-spacerun: yes;">&nbsp; </span>to forecast the strength and direction of the business cycle of the US economy. The results of this study indicate that it is possible to derive an accurate forecast of the strength and direction of the business cycle by combining economic theories and the technique of diffusion index.<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span></span></span></p>


Author(s):  
George Saridakis ◽  
Priscila Ferreira ◽  
Anne‐Marie Mohammed ◽  
Susan Marlow

2016 ◽  
Vol 19 (4) ◽  
pp. 467-478
Author(s):  
James Bernstein ◽  
Leroi Raputsoana ◽  
Eric Schaling

This study assesses the behaviour of credit extension over the business cycle in South Africa for the period 2000 to 2012. This is motivated by the proposal of the Basel Committee on Banking Supervision to look at credit extension over the business cycle as a reference guide for implementing countercyclical capital buffers for financial institutions. The study finds that credit extension in South increases during the trough phase, while the relationship between credit extension and the business cycle becomes insignificant during the peak phase. The study also finds that credit extension decreases during the expansion phase, while it increases during the contraction phase. Thus we do not find any evidence of procyclical behaviour of credit extension in South Africa, and the latter should therefore be used with caution and not as a mechanical rule based common reference guide for countercyclical capital buffers for financial institutions. 


2013 ◽  
Vol 19 (2) ◽  
pp. 425-445
Author(s):  
Sumru Altug ◽  
Warren Young

The transcript of a panel discussion marking three decades of the real business cycle approach to macroeconomic analysis as manifested in Kydland and Prescott's “Time to Build” (Econometrica, 1982) and Long and Plosser's “Real Business Cycles” (Journal of Political Economy, 1983). The panel consists of Edward Prescott, Finn Kydland, Charles Plosser, John Long, Thomas Cooley, and Gary Hansen. The discussion is moderated by Sumru Altug and Warren Young. The panel touches on a wide variety of issues related to real business cycle models, including their history and methodology, starting with the work of Prescott and Kydland at Carnegie Tech and Plosser and Long at Rochester; their applications to policy; and their role in the recent financial crisis and likely future.The panel discussion was held in a session sponsored by the History of Economics Society at the Allied Social Sciences Association (ASSA) meetings in the Randle A Room of the Manchester Grand Hyatt Hotel in San Diego, California.


Author(s):  
Kyle Bagwell ◽  
Robert W. Staiger

Abstract Empirical studies have repeatedly documented the countercyclical nature of trade barriers. In this paper, we propose a simple theoretical framework that is consistent with this and other empirical regularities in the relationship between protection and the business cycle. Focusing on self-enforcing trade agreements, we find theoretical support for countercyclical movements in protection levels. The fast growth in trade volume that is associated with a boom phase facilitates the maintenance of more liberal trade policies than can be sustained during a recession phase in which growth is slow. We also find that acyclic increases in the level of trade volume give rise to protection, implying that whether rising imports are met with greater liberalization or increased protection depends on whether they are part of a cyclic upward trend in trade volume or an acyclic increase in import levels.


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