chapter  4
28 Pages


The rigour of academic discipline has not been proof against the best of economists having their judgement swayed by the course of the business cycle. Thus Nobel prize winner Paul Samuelson, just before the peak (December 1969) of the long economic upswing in the USA which started in 1961, was so moved by the experience of continuous prosperity to remark that the National Bureau of Economic Research (long established as the primary ‘measurer and referee’ of the US business cycle) ‘had worked itself out of its first job’. In the same year (1969) a conference volume appeared under the title Is the Business Cycle Obsolete? This was the heyday of fine-tuning, when most economists and market-participants really did believe that governments could prevent the economy from slipping into recession or overheating by timely changes in monetary and fiscal policies.