THE SUSCEPTIBILITY of a modern economy to fluctuations in income and employment-and the character of these fluctuations -is due in large part to the underlying institutional structure. For this reason fruitful efforts toward economic stabilization usually will involve significant (and perhaps painful) institutional changes. In the following pages, we shall consider the role of institutions as a condition or determinant of economic fluctuations-and as a factor in stabilization policy. In so doing, we shall refer especially to the theories of Wesley C. Mitchell, Lord Keynes, J. R. Hicks, and J. A. Schumpeter.