Development and Underdevelopment in the History of Economic Thought

Description = Destruction: The weekly reports by the Berlin Institute for Business Cycle Research (1928-1930)

Kuster Marius, University of Lausanne

In November 1927, the newly founded Berlin Institute for Business Cycle Research (Institut für Konjunkturforschung, IfK hereafter) decided to publish weekly reports on the condition of the economy. Including business forecasts and analyses of specific markets, these short reports should inform industrials and businessmen. Their novelty did not lie in the weekly publication, but in the public reaction they triggered. The fear spread amongst industrials and journalists that the detailed analyses and forecasts in the reports exercised too much influence on the business cycle itself. Too precise a description would lead to the destruction of the cycle. I argue that such fears were new phenomena for business cycle analysts and affected primarily researchers at the IfK. By comparing the IfK’s weekly reports to earlier weekly business letters and to contemporary weekly business reports, I aim to show on the basis of two aspects why precisely the weekly reports triggered such fears. Firstly, the reports radiated “scientific accuracy” and were seen as particularly influential due their precise instructions to the readership. Secondly, due to close connections to the industry, the reports were able to provide more detailed information about specific markets. By presenting the IfK’s response to such criticism, I give insight into scientific debates new fears were able to provoke even before the Great Depression.

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Keywords: "business cycle" "Institut für Konjunkturforschung" "Ernst Wagemann" "Wochenberichte" "weekly reports" "description" "observation"

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