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In his bestselling The Worldly Philosophers, Robert Heilbroner puts the focus on the visions and analyses of the great economic thinkers from Adam Smith to Joseph A. Schumpeter. Worldly philosophy is considered as a child of capitalism and worldly philosophers as system-builders addressing the long-run development of the economy and the society. This implies viewing the economy as historically and institutionally situated demanding a more interdisciplinary perspective and embedding economics in the social sciences. The article compares the work of Heilbroner and Adolph Lowe who was Heilbroner’s main mentor. The focus is on their reflections on Smith and Schumpeter. Heilbroner considered Smith as the first worldly philosopher of whose Wealth of Nations a German translation was published already in 1776 in Stuttgart, Lowe’s native city. Lowe’s early work on business cycles was strongly inspired by Marx and Schumpeter’s emphasis on the role of capital accumulation and technical progress as well as Schumpeter’s distinction between statics and dynamics. Lowe was forced to emigrate from Nazi Germany in spring 1933, only half a year after Schumpeter’s move to Harvard where Heilbroner studied in the late 1930s when Schumpeter enjoyed making provocative statements on the Great Depression which was still not yet overcome.

This study examines the effect of inflation on stock returns in the context of the policy reaction function theory. This theory contends that the nature and extent of the government’s policy reaction to inflation will depend upon the current level of economic activity. A contractionary policy, which will depress stock returns, is more likely when the economy is a ta business cycle peak than at a trough. Therefore, the effect of inflation on stock returns varies with the stage of the business cycle. In order to test this theory, monthly consumer price indices, capacity utilization indices, and stock returns were examined. The results of using the returns of both a market index and a sample of individual companies between 1962 and 1988 support the theory.

In his opening methodological lecture, Palyi contrasts correlation, first with statistical analysis, and second with causal analysis and explanation. The students are cautioned that the “Correlation method creates the presumption of an accurateness which it does not in reality possess” and that “Business cycle theories are

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This paper estimates the sensitivities of the output of the manufacturing industries of the four Southeast countries (Indonesia, Malaysia, Philippines, Singapore) to both the country-specific and global business cycle fluctuations. The study investigates whether the business cycle exposures of these industries differ to their nature classified as producing durable or nondurable goods and also to booms and recessions.

Using annual time series data on sectoral manufacturing production indices for major manufacturing industries over the period from 1999 to 2018, this paper uses the seemingly unrelated regression (SUR)–based generalized least square estimator to estimate the exposures of each industry for each of the four countries to local and world business cycle.

The individual country analysis indicates that generally the sensitivities of the ASEAN manufacturing industries to booms and recessions are different from the pattern observed in the developed countries and Russia. We do not find evidence consistent with the commonly held view among economists and business managers that demand for durable goods flourishes in booms and falls in recessions. Also, very few industries exhibit an asymmetric reaction to booms and busts. However, the analysis of panel data reveals the expected pattern of industrial sensitivities to the local business cycle only.

The paper makes several contributions. Firstly, the model proposed in the paper estimates sensitivities of industries to both the local and global business cycle variations. Secondly, the model enables us to explicitly test the asymmetric reaction of industries to booms and busts. Thirdly, the paper is the first attempt to estimating business cycle exposures for manufacturing industries in emerging markets.

The purpose of this paper is to examine how occupational mobility varies over the business cycle and how selected factors contribute to occupational mobility in different stages of the business cycle.

Using annual micro data from the Estonian Labour Force Survey (2001-2010) and implementing probit models with interaction terms, the paper investigates occupational mobility as a change of occupation in two successive years during recovery, boom and recession periods.

The analysis indicates that occupational mobility is higher during the recovery and boom periods and lower during the recession stage. The demographic characteristics (gender, marital status, knowledge of local language) influence the probability for occupational change during the recovery stage of the business cycle. The position of employees in the occupational hierarchy is significant during the recovery and boom periods. Employees working in the public sector have a lower probability for occupational change compared with private sector employees during the recession. Training has a positive effect on occupational mobility during recession. Tenure reduces the probability of occupational mobility over the whole business cycle.

The paper contributes to the literature by providing new results about the role of different factors of occupational mobility over the business cycle. This is among the few studies addressing the variation in the occupational mobility of employees from the public and private sectors. Interactions between the position of the employees in the occupational hierarchy and the ownership form of their employers and the economic sectors add to the understanding about the mechanism of occupational mobility over the business cycle stages.

This paper examines the implications for bank regulatory and monetary policy of the business cycle; the nature of which is being transformed by the forces of globalisation and the communication and information technology revolution. Asset price fluctuations and overinvestment appear to have become more common, and ‘cheap money’ has been a causal factor. More risk‐related ‘Basel’ bank capital adequacy requirements, combined with more rigorous bad loan provisioning policies and ‘marking to market’ will result in bank regulation amplifying cycles. Hence, monetary policy must be closely coordinated with bank regulation policy to attenuate the cycle and the impact of asset price fluctuations.

In this paper, we study financial foundations of Austrian business cycle theory (ABCT). By doing this, we (1) clarify ambiguous and controversial concepts like roundaboutness and average period of production, (2) we show that the ABCT has strong financial foundations (consistent with its microeconomic foundations), and (3) we offer examples of how to use the flexibility of this approach to apply ABCT to different contexts and scenarios.

This chapter uses Austrian capital theory to illustrate why empirical work can be elusive in typical Austrian themes. It explores the nature of the problem and different alternative solutions to empirical challenges. This chapter also discusses the Austrian literature’s epistemological approach to empirical work to shed light on the controversial relationship between Austrian theory and empirical testing. Finally, this chapter offers examples of how Austrian and mainstream economics can find a common empirical ground.

The concept of “neutral money” has a long history in monetary theory and macroeconomics. Like a number of other macro concepts, its meaning has been subject to a variety of interpretations over the decades. I explore the way in which Hayek used this term in his monetary writings in the 1930s and argue that “neutrality” for Hayek was best understood as the idea that monetary institutions were ideal if money, and changes in its supply, did not independently affect the process of price formation and thereby create false signals leading to economic discoordination, and especially of the intertemporal variety. This view was rooted in his work on money and the trade cycle in the late 1920s and early 1930s and also bound up with his understanding of “equilibrium theory.” The importance of his concept of neutrality was that it served as a benchmark for judging the comparative effectiveness of different monetary regimes and policies. That use is still relevant today.