ABSTRACT
Business Cycles was a follow-up to Joseph Schumpeter's Theory of Economic Development, and he hoped that it would demonstrate that his development theory was either right or at least consistent with the historical facts. He hoped, also, that this book would help to redirect the attention of economists to the study of the economy and an effort to understand the economic interrelationships theoretically, historically, and statistically. Schumpeter endeavored to bring his analysis of economic change closer to the statistical and historical evidence by setting down a series of approximations that were increasingly realistic models of the economy. By innovating, the entrepreneur initiates disequilibrium into the economy which appears first as a period of prosperity with rising production, prices, incomes, and consumption. Economists have long regarded one of the weak points of Schumpeter's economic development theory to be the periodic clustering or bunching of innovations.
