Business Cycles : From John Law to the Internet Crash

During our lifetime we experience any number of business cycle crises which undermine our confidence. We also experience the 'happy days' when our faith in the future becomes almost limitless, and when we forget that the tide will turn again. But do business cycles exist? What creates them? Is it mass psychology, or phenomena in the management of business? Are the banks to blame or should we be looking to the media, the unions, the entrepreneurs or the politicians?
Lars Tvede's story moves back in time to the Scottish gambler and financial genius, John Law, and then on to the distracted Adam Smith, the stockbroker Ricardo, the investment banker Thornton, the extrovert Schumpeter, the speculator Jay Gould and many others. Gradually we reach the computer jugglers of the modern day who, with giant networks of equations, try to solve the same questions that have attracted the attention of classical economists throughout the centuries.
Throughout this volume, business cycle theories are used to explain actual events. We are told how theoretical thinking has reflected the economist's own experiences of hyper-inflations, depressions, speculation orgies, liquidity squeezes and - most recently - the Internet crash. The reader can follow the narrative to discover how economists often thought that problems had been solved until new data changed the economic picture once again.