[Marxism] Spectral analysis

Les Schaffer schaffer at optonline.net
Thu Jul 1 08:39:15 MDT 2010


Michael Perelman wrote:

> Schumpeter's cycle theory is very interesting.  Economists had proposed 
> several cyclical pattern, as Dan suggested.  He then claimed that a 
> combination of these cycles gave a fair description of the GDP over time.

i found a copy of his second book online [Reference 0]. i was surprised 
to find only two graphs in the entire treatise, very similar to the 
graphs i put up for Dan a couple weeks ago.

> I doubt that the pattern he found would hold today, but it was an 
> interesting exercise.

i did some reading and found that before these types of models, people 
tried to correlate economies with sunspot cycles, climate, and so forth. 
see some of the references below.


> Schumpeter had little knowledge of math.  I wonder what grad student worked 
> it out for him.

i read through a couple bios and reviews of Schumpeter. From Reference 7:

"""
Today, research efforts comparable to what Schumpeter was trying to
do often employ teams of half a dozen statisticians, economists, and 
other social scientists. But in the 1920s and 1930s, this model of 
academic research was just getting started, and Schumpeter worked almost 
entirely on his own. As his student James Tobin recalled, “He didn’t 
recruit students to help him; he didn’t suggest topics arising in his 
own research to students for papers or dissertations; he didn’t try out 
the ideas or findings of his draft chapters in seminars. That so 
enormous an achievement was the product of lonely research tells what a 
great scholar Schumpeter was.”
"""

Wikipedia article on Schumpeter claims that he believed the math tools 
did not yet exist to handle his ideas quantitatively, so i gather his 
development was qualitative. See Kuznets quotes in the PDF of Reference 7.

There is one reference that emphasizes Schumpeter's highlighting of 
innovation and entrepreneurship as the fundamental principle of 
capitalism and its glory, from Reference 7:

"""
Of all economic systems, capitalism best enables people to create
ventures before they possess the necessary funds and other resources
to found an enterprise. For any given innovation, the Entrepreneur
“may, but need not, be the person who furnishes the capital.” In the
end, “it is leadership rather than ownership that matters.” The failure
of both the classical economists and Karl Marx “to visualize clearly en-
trepreneurial activity as a distinct function sui generis”—a distinction
Schumpeter always underscored—was a crucial flaw in their analysis of
capitalism.22
"""
some notes follow from a couple hours googling business cycles.

Les



References
=============

0. Schumpeter's Cycles text 
bookhttp://books.google.com/books?hl=en&lr=&id=-OZwWcOGeOwC&oi=fnd&pg=PR6&dq=schumpeter+cycle+theory&ots=iKa_l1xcCc&sig=wNHY-Mu5x_9_B_cDl3eY8zMwG3w#v=onepage&q&f=false

1. http://www.eduardoloria.name/articulos/Koopmans.pdf

"Measurement without Theory" by Tjalling Koopmans, in Review of Economic 
Statistics, Aug 1947

discusses the work of Burns and Mitchell, from 1946 "Measuring business 
cycles". discusses empiricism and compares theirk with the empiric work 
of Tycho Brahe and Johannes Kepler.

2. nonlinear oscillation models, and dicussion of shocks vs natural 
oscillations

http://www3.interscience.wiley.com/journal/119307553/abstract

NONLINEAR BUSINESS CYCLE MODELLING
Andy Mullineux 1 WenSheng Peng 1
   1 University of Birmingham

Nonlinearity • business cycles • chaos • Schumpeter • Marx • Keynes • 
empirical evidence
ABSTRACT

Abstract. Literature which employs nonlinearities to explain economic 
fluctuations, commonly called business cycles, is surveyed. Relaxation 
of the linearity assumption significantly increases the range of 
possible dynamic solution paths and introduces the possibility that 
business cycles are endogenously determined. The dominant post-war 
modeling strategy has been the Frisch (1933) (and Slutsky, 1937) 
inspired one of developing essentially (log) linear economic models 
which produce damped cycles (or monotonic damping) to propagate the 
energy provided by repeated random (or autocorrelated) shocks. The cycle 
is exogenously driven, since it would die out in the absence of shocks. 
Deterministic (nonstochastic) nonlinear models can produce a wide range 
of endogenous fluctuations, including: stable limit cycles; growth 
cycles; and chaotic output, which have the appearance of random 
fluctuations. Further, the same model can produce qualitatively 
different outputs according to starting and parameter values. If the 
possibility of shocks to parameters is admitted, then behaviour can 
change abruptly following shocks. Evidence on the existence of 
nonlinearities and chaos in macroeconomic time series is assessed and 
alternative approaches to modelling dynamic economic development, 
related to the work of Keynes, Marx, Schumpeter and Shackle, are 
discussed. Their ideas have not proved readily amenable to mathematical 
modeling, but attempts to encapsulate some of them are reviewed.

see also: 
http://pchen.ccer.edu.cn/homepage/Homepage%20Chinese/AED2003/readingpapers/DetermModel/GoodwinPersCyc51.pdf

which discusses addition of non-linear elements into an econometric 
theory of business cycles. almost all math/physics.

3. reviews attempts to link business cycle theory to cycles of war

https://umdrive.memphis.edu/rblanton/public/POLS_7508_Fall_2009/rosecrance_long_cycle_theory.pdf

Review: Long Cycle Theory and International Relations
Author(s): Richard Rosecrance
Reviewed work(s):
     Long Cycles of Economic Growth and War: Toward a Synthetic Theory. 
by Joshua Goldstein
     Kondratieff Waves as War Cycles by Joshua Goldstein
     Long Cycles in War and Economic Growth by Joshua Goldstein
     The Long Wave Cycle by Nikolai Kondratieff
      ...
Source: International Organization, Vol. 41, No. 2 (Spring, 1987), pp. 
283-301
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/2706663

4. Discussion of Schumpeter's relationship to the development of 
econometric theory. apparently he helped it get started but continually 
critiqued it.

http://publishing.eur.nl/ir/darenet/asset/9747/1951RES.pdf

Schumpeter and Quantitative Research in Economics, J. Tinberg, The 
Review of Economics and Statistics, May 1951


5. overview by Prescott (Nobel prize for this stuff?)  and Cooley, 
details modern attempts to model cycles:

    http://www.econ.ubc.ca/siu/teaching/e602/chapter1.pdf

from Frontiers of Business Cycle Research.  Prescott's bibliography home 
page:

   http://www.minneapolisfed.org/research/prescott/papers.html

and some further discussion of empiricism, Kepler, and gravitational 
theory here:

   https://minneapolisfed.org/research/WP/WP590.pdf

6. example of a more modern, physics-oriented attempt to model business 
cycles using "heterogeneous interacting agents".

   http://arxiv.org/pdf/cond-mat/0312096

7. Schumpeter's Business Cycles as Business History, by Thomas McCraw:

http://hbswk.hbs.edu/pdf/20070207_Schumpeter.pdf

8. some interesting comments in: The Unreality of the "Real" Business 
Cycle by RObert Sidelsky

http://www.skidelskyr.com/site/article/the-unreality-of-the-real-business-cycle/

and Do Technological Innovations Cause Business Cycles?

   http://www.marketoracle.co.uk/Article16293.html




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