Abstract

Since at least the middle of the 1800s, since long before modern national accounting was developed, it has been universally recognized that a characteristic of developed capitalist economies is that periods of output growth alternate with periods of contraction. Originally called “trade cycles,” these repeating expansions and contractions came to be known as “business cycles” by the second half of the 20^th century. The term is somewhat unfortunate in the sense that there is neither theoretical nor empirical support for these expansions/contractions having the regularity of repetition suggested by the word “cycle,” but it is nevertheless the term that has come to be universally used for this characteristic of capitalism.