cause of ation of economic cycle.doc

cause of formation of economic cycleXue LiangOne,Classification of causes of economic cyclesMany causes of economic cycle,According to economic cycle generation played a major or minor role,It can be divided into the basic factors and other factors.(a) the basic factorsRefers to the economic cycle is formed having a fundamental role in the causes or conditions.Such as capital allocation; the evolution of monetary functions; “market mechanism ; private ownership ; human characteristics .They are periodic to economy related to the formation of the effect, can be expressed as follows:Human characteristics private ownership market mechanisms Distribution according to capital, Monetary function evolution economic cycleSimple explanation of the basic factors:(1) human characteristicsIts main performance might be summarized as follows: the never-ending exploration (the objective world and the subjective world); insatiable pursuit (of material comfort and enjoy the spirit of) . (Because we have a strong thinking, imagination and ability, concept, confidence, desire and mental activity on our behavior and the objective world interact powerful .)(2)Private ownershipDriven by the characteristics of the human itself,Scientific and technological level and production capacity continues to increase, growing social wealth,Private ownership increasingly vibrant .(3)Market mechanismOn private ownership foundation,Advocating free competition and free exchange of market mechanism,As economic development of the preferred architecture.(4) Distribution according to capitalIn the market environment, distribution according to capital gradually occupy an important position.(5) Monetary function evolutionIn the commodity economy in the initial stage of development, the currency as a general equivalent, its function is the means of circulation, means of payment, value scale (it might be called primitive functions.);With the economic development, wealth accumulation and distribution according to capital, the functions of money appeared evolution, with the investment and proliferation (it might be called modern functions.),As people of the currency can be quick, direct investment (such as buying shares) or indirectly (such as investment bank), to obtain its proliferation.The functions of money evolution, distribution according to capital, make it break the gold standard the shackles, its power has been more unprecedented publicity,Economic cycle is generated to provide the most direct and strong driving force.Such as:economy obtains the rapid development.Wealth distribution balance is to capital tilt; (the widening gap between rich and poor.)Under the banner of economic development, global money supply is growing rapidly; (excess liquidity has become a source of excess surplus of products, investment .)Many consumers as one of the rentier and have become the investors; (social consumption is relatively atrophic.)Economic cycle gradually. (b)Other factorsRefers to the economic cycle process to produce different effects causes or conditions.Such as various types of natural calamities and man-made misfortunes, major scientific and technological progress, virtual economy, policy measure error. (such as sunspots and other disasters are natural disasters;Financial crisis and other issues for the man-made disasters;Excessive rescues the city is a mistake behavior;Fictitious economy activity while reducing the entity economy excess liquidity, overinvestment pressure, but the gap between the rich and the poor has enlarged.)A butterfly flapping its wings in Brazil, in the United States may cause a tornado in Texas (Lorenz, 1979).If the economic cycle metaphor for the tornado, Butterfly Effect can explain the basic factors and other factors:The butterfly flapping its wings is the formation of a tornado of other factors;If there is no atmospheric, the sea currents and the basic factors, Even if there are thousands of butterflies fluttering wings, can form scenery rather than storm;On the contrary, even all the butterfly wings are stopped, Texas tornado also wont disappear from the scene.Two,The relationship between economic cycle causesThe basic factors and other factors is the complicated interaction, illustrated as follows:Figure 1 The forming reasons of economic cycle influence each otherEconomic cycle causes the interaction, also contains our spiritual factors (such as philosophy, confidence, psychological activities of desire) the tremendous role, mental factors attachment to the basic factors and other factors, reciprocal causation, be inextricably involved.Three, the Economic cycles causes a combination of roleEconomic cycle causes the interaction between forming combination action, decided economic cycle of specific process and the final result.For example, the basic factors and other factors under the combined action of:Peoples ability to occupy (or desire to occupy) a growing tendency to infinity; In the infinite has capacity under the drive, in the distribution according to capital and other factors, more and more assets (including labor) into capital, productivity gets rapid development, but because natural resources (including environmental) relative limitation, productivity is necessarily less than our ability to occupy;Because of the many consumers as investors; the gap between the rich and the poor is difficult to eliminate: poor by the capacity to pay such constraints, rich by the physiological capacity restriction; our spending power (social consumption) is less than our productivity.When the possessive capacity is greater than production capacity; capacity is greater than consumption capacity; economic cycle will occur.Figure 2 Economic cycle causes and related factors interactionIn different historical stages and under different social conditions, economic cycle causes can be generated between the different combination and function (including mental factors influence and role), so that every economic cycle of specific processes are different; (i.e., different industry and product is different the rise and fall of.)But the economic cycle basic course seems one principle runs through it all.(solid line shows part)Economic cycle of the specific process of periodic to economy causes also has main effect: the economic cycle in the process of information after the convergence, in a variety of ways to feedback, direct impact on our mental state, psych