ABSTRACT
A satisfactory theory would require to-day more than ever, a comprehensive treatment of the tremendously increased material, the working out of the numerous individual theories based upon different indices of business conditions and of their relation to one another. The reaction of the change in all conditions upon new enterprises may become visible earlier and more strikingly than that upon old businesses. Businessmen's conduct in the period of depression is clearly ruled by the element of actual or impending loss. The boom itself of necessity causes many businesses to run at a loss, causes a fall in prices apart from that due to deflation, and in addition causes deflation through credit contraction — phenomena which all increase secondarily in the course of events. Thus the stock market sometimes exhibits speculative preliminary crises long before a real turning point arrives, which are then overcome and make room for a further upward movement, which still belongs to the same boom.
