ABSTRACT
In the eighteenth century, as in the seventeenth, outside factors were the main determinants of the level of economic activity, and fluctuations were, to a great extent, random. Like many eighteenth-century economists, Thomas Attwood argued that declines in the flow of expenditure would depress prices, and that falling prices would lead to depression, with low levels of both production and employment. In parts of his writing Attwood went further towards a theory of the cycle, by suggesting “natural remedies” for expansion and contraction. However, although he recognized that there might be such “natural remedies” for economic fluctuations, Attwood stressed the role of monetary policy. Business cycle theory came to be seen as a distinct branch of economics. Though major economic crises in the seventeenth century were rarely, if ever, caused by bad harvests alone, the weather was an important factor underlying commercial fluctuations.
