BOOMS AND SLUMPS.

Hawke's Bay Herald-Tribune, Issue 163, 28 July 1937, Page 4

BOOMS AND SLUMPS.

Under the title "Prosperity and Depression," the Economic Intelligence Service of the League of Nations has brought out a book on the question of business cyeles and the reourrence of periods of prosperity and depression, This book is intended as a flrst stage in an inquiry into this subject which is now beginning to attract increasing attention, nbt only among economists, but also statesmen and public opinion, in view of the general belief that the world is approaching a boom. The book does not claim to give an entirely new theory, the purpoee being rather to evolve order out of the conflict of views and to present a synthesis which may secure agreement between schools of thought. The author helieves that a general theory can he evolved which will he of practical value in explaining the xnost important aspects of the business oycle. He discusses the deflnition and measurement ' of the business cycle, then analyses the mechanism of the process of expansion and contraction and examines the turningpoints in the cycle (the crisis and the revival). He takes the view that any economic system organised on the lines of our present individualistic money-price economy is liahle to cumulative processes of expansion and contraction, particularly on account of the fluctuating profitability of investment. Stress is. laid, however, on certain aggravating factors such as cost-rigidities and monetary instahility.