Business cycle to 2008’s crisis

Since the collapse of the financial markets in 2008, it’s usual to compare the subprime crisis to 1929’s crisis. What seems obvious today for many historians and economists deserves attention here somewhat. Indeed, the history of economic analysis suggests that economists preferred to analyze the origin of economic fluctuations and situations of markets’ disequilibria rather than the dynamics of financial crisis. This paper proposes to analyze the 2008 crisis using the method of systems dynamics with CLDs (causal loop diagrams) and SFDs (stock and flow diagrams) – developed by Forrester (1961, 1968, 1969) and Meadows, Meadows and Randers (1972) in The Limits to Growth report. This method gives new perspectives for the business cycle and challenges the usual method (econometrics) of economists.