PhD thesis Chapter Ⅸ: Bank assets and the business cycle

摘要

The role played by the monetary mechanism in the business cycle is obviously too large and controversial a subject to be treated with any degree of exhaustiveness in this study. It cannot, however, be completely omitted. Practically all theories of the business cycle attribute some degree of importance to fluctuations in the volume of credit which in turn are intimately connected with movements of bank assets. The outstanding monetary theory of the business cycle is, of course, that of R.G. Hawtrey. He has frequently declared that the business cycle is purely a monetary phenomenon. His general analysis is so well known that only a very brief sketch of it will be presented here.