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Compare and contrast the two theories of the business cycle.
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Compare and contrast the two theories of the business cycle * "The business cycle is the short-term fluctuation of total output around its trend path". (David Begg, Stanley Fischen, Rudiger Darnbusch, the Business Cycle its still a puzzle, Economics Perspectives, 1997, Pages 519-525, McGraw-Hill, 5th edition.) Everyone is so conscious of the business cycle because most sectors of the economy move up and down together. This phenomenon is referred to as comovement, is a central part of the official definition of the business cycle. The definition is set by the Bureau of Economic Research (NBER), which decides when recessions begin and end. The NBER's definition states " a recession is a period of decline in total output, income, employment, and trade, usually lasting from six months to a year, and marked by widespread contractions in many sectors of the economy. (Christiano, Lawrence J, Fitzgerald, Terry J, economic Perspectives, 1998 4th quarter, vol....
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