Economic Cycle Analysis

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To fully explain the essence of the mechanisms governing economic policy of the state in the period of economic crises one has to begin with understanding the origins of different policies. In economic theory many views on the mechanism shaping business cycle has occurred and the common element is economic crisis. To this day, no consensus has been reached in this area.
In this essay I will show the inner-correlation between Marx, Keynes and Schumpeter in thinking about boom and bust. It is an attempt to compare their theories about origins of the bust, relations in a changes occurring in capitalistic economy due to the development and ways to manage the economy through policies. I will draw attention to the differences and similarities in
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According to him development occurs through a cyclical process while cyclical busts brings development. The depression phases of capitalism are sign of economy moving forward, making a way for new markets to emerge and grow. Referring to the already formulated the theory of monopolistic assertions, the economy is characterized by constant change, turbulence so different after all from stationary states used to describe the economy by the classical economists. In this variable economic revolutions occur, which in turn lends the progress of the qualitative measurement. Capitalism makes the jump to a higher level of development, leaving behind ashes of competitive companies that couldn’t keep up with the process. This process called creative destruction is strongly connected to Marx's writing about same topic .He also states that because of the crisis, the capitalism moves forward, destroying on its way repentantly a whole range of production forces. Consequently, he stated that the ''creative destruction'' forces would give economy energy but also it would be a cause for its destruction. Schumpeter partly agreed but also argued that the economy would be destroyed not by its failure but success. He saw destructiveness as mostly a better of normal cost of doing business. Both of them agreed that capitalism is a system that is always revolutionizing itself and incapable of…show more content…
Both Marx and Keynes recognized some major properties of capitalistic behavior and Shumpeter agreed with both on the matter. He disagreed nonetheless with labeling them as failures - where others saw flaws he recognize a ways for new development. Marx predicted a death of capitalistic system due to a contradiction within it, and Keynes proposed reforms to control this disputing properties. Schumpeter never denied completely any of the approaches and agreed on them partly. The correlation between Schumpeter thinking about innovations and Marx understanding of the centrality of the interaction between technologies (called by him forces of production) is also strongly present.
Theoretical explanations are not sufficient either because of idealism, partial ways of looking at the problem or just unconscious avidity, seeking to explain economy as linear process. Many to these theories have been partly disproven but the relevance and importance of them is still present.
Marx, Keynes and Schumpeter surprisingly are not such strangers after all. Each of them gave us an insight into constructing a theory of economy suitable to our prerequisites. It is also a very telling sign our times, since current crisis led us to question our whole economic system and search for solutions in a writings of thinkers from early economic
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