An Introduction to Economic Dynamics

11 BUSINESS CYCLES I: SAMUELSON’S MULTIPLIER-ACCELERATOR MODEL

DOI: 10.4324/9780429324406-11

One of the main objectives of the study of macroeconomics is to understand the business cycle fluctuations. While the classical economists were interested in long cycles in the capitalist economies, the early contributors in the Keynesian tradition such as Paul Samuelson, John Hicks and others like Michal Kalecki, who straddled between the two traditions, were interested in understanding the cyclical fluctuations in the short run. The business cycle studies were at the heart of macroeconomics research in the 1920s and the 1930s. Paul Samuelson’s paper published in 1939 is one of the seminal contributions to the business cycle literature. The publication ...