Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

Soviet Investigations in Business Cycles theory

Avtonomov Vladimir, National Research University Higher School of Economics
Entov Revold, National Research University Higher School of Economics

The interest for business cycles and especially crises was always accompanied by the critical stance to capitalism in general. Marx was the greatest example of this correlation. The logically founded unavoidability of crises should have showed the inadequacy of capitalist system regarding the contemporary level of productive forces. As well known, the Marxist doctrine was especially rapidly and widely spread in Russia. Mikhail Tugan-Baranovsky was strongly influenced by Marxism especially in the early periods of his career when the cycles were the main object of his investigations. His theory of cycles was certainly based on Marx’s reproduction schemes, somewhat extended and modified. His students, first of all Kondratiev, who founded the Conjuncture Institute continued the Russian traditions of business cycles research. Besides Marxian influence, Russian investigations on business cycles were supported by the remarkable progress in mathematical and statistical research we can see in Russia in that period. This direction we can trace in the work of Eugen Slutsky who also worked in the Conjuncture Institute and created an original theory of business cycles. There also was another important tradition of business cycles research in the West connected with Wesley Mitchell and his school within American Institutionalism. It was focused not on theoretical issues but on statistical data and empirical investigations about “what happens during the business cycle”. This direction was a part of applied economics and was connected with economic forecasting and policy. This tradition was considered very important for Soviet authorities because relevant forecasts of economic downturns could be important for World revolution in the near future. On the other hand, Marxism was the official ideology of the Soviet union and Soviet economic theory had to be built on Marxian political economy. This dual approach to business cycles was amply reflected in the research activities of Soviet economists. In 1956 The Institute of World Economy and International Relations of the Academy of Sciences was founded whose main task was to give the “instances” an objective picture of Western economy. Within this Institute a special Section of Business cycles was organized. It had to unite the Marxist theoretical traditions with applied research of Western economists, especially the NBER founded by Wesley Mitchell and new mathematical instruments like large econometric models. Each member of the section was responsible for particular aspects of business cycles and for monitoring cyclical behavior of respective statistical series (fixed investments, inventories, private consumption expenditures, debts and bankruptcies, behavior of financial intermediaries etc).

Area: Eshet Conference

Keywords: Business cycle theory, Russian and Soviet economic theory

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