Wednesday, October 22, 2014

Economic Cycle, Invisible Hand, Growth

One objection to any Government intervention, including the regulation of Interest Rates, in Economic activity, is that it tampers with patterns conceived as 'cyclical', and characterized as 'natural'.  Now, two properties of a Cycle are that it returns to its starting point, and that any transition from one of its segments to another is determined by the whole, with, in some cases, a third, that the pattern is self-caused.  Thus, daily and yearly cycles include the first two, but, since those patterns are expressions of celestial rotations, they are not self-caused.  So, implicit in the standard concept of the 'Economic Cycle' is that it is as transcendent to the activity that are its phases as is the 'Invisible Hand', and that Growth is never more than a temporary episode.

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