ABSTRACT
Figures 5. 1. 1 and 5. 1. 2 are graphs of an index of business activity. The index is composed of one set of 10 series of annual data from 1790 to 1855 and another set of annual data from 1855 to 1901 and so on. The fluctuations above and below normal are computed in a special way. The graphs are carried forward in Figure 5. 1. 2. The graphs seem to sell the idea of a business cycle-the serial correlation in the deviation of output from trend and the serial correlation in a number of other economic series which exhibit cO-movements, be they pro-or anti-cyclical and with or without a lag with output. There are “booms” and “stumps” in the graphs along a trend line. One uses this evidence to postulate the existence of economic cycles of varying lengths. The cycles postulated are the following: Kondratieff [1930] 50-60 year wave; Kuznets 15-25 year cycles, Kuznets (1930), Lewis and Oleary (1955), Isard (1942); major 6-10 year cycle, 6-10 year cycles, Hansen (1951), Kitchen (1923), Schumpeter (1939); long waves, Howrey [3], Adelman and Mandel [10] and Lucas and Sargent [9].
