ABSTRACT
The efficiency of formal codes is the efficiency of classification. Theories in economics divide themselves into those which describe situations or states of affairs, and those which describe steps or movements of transformation by which one situation is carried into others. In the pursuit of elegant simplicity, analytic theories have a natural advantage over constructive ones. Constructive or transformational theories purport to show some regularity, some elements of necessary sequence, in the historical succession of states or events. One type of such theories claims that history in the large, as described by great aggregates such as general output, employment or general price levels, broadly repeats itself in a constant pattern of phases of prosperity and depression. Such theories have something in common and some characteristics widely at variance, with analytic theories. Theories of the business cycle well illustrate the use of pre-existing formal conceptions to represent economic phenomena.
