4 Theories About the Business Cycle
Religion & Liberty Online

4 Theories About the Business Cycle

Expansion. Contraction. Repeat.

For almost 200 years, we’ve recognized this boom-and-bust pattern as the business cycle, the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. But while we all know what it is, we don’t always agree on what causes the business cycle.

In the following series of four videos, economist Tyler Cowen briefly explains four different theories — Austrian Theory, Keynesian Theory, Monetarist Theory, and Real Business Cycle Theory — and highlights some of the insights and flaws with each.

Austrian Theory

Keynesian Theory

Monetarist Theory

Real Business Cycle Theory

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).