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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (27944)	1/27/2003 8:41:54 AM
From: Moominoid	Respond to of 74559

CB I agree on exchange rates being a factor. The classic gold standard led to periods of inflation and deflation. Also since WWII monetary and fiscal authorities have tried to regulate the level of economic activity in a way they didn't before. I think also the larger size of the economy and greater wealth leads to smaller fluctuations. For example in an agricultural economy a drought has a big effect on the GDP. Also I would think that the size of upswings correlates to the size of downswings now too due to the amount of capital investment by business and consumers in those upswings and then over capacity and lack of need for investment in the downswings. Some will prefer to focus on the real (i.e. actual investment) aspect of that and others on the monetary/financial (debt/credit). It is all important. Looking for causation is certainly not silly. But to claim that one factor is the cause and it has been "proved" by someone is silly. As you should know, it is much easier to disprove something using data and statistics rather than prove it. There are some thinsg that can be proved mathematically in macroeconomics, but not a lot. David