Rejecting the idea of an equilibrium business cycle, this book, originally published in 1927, studies those industrial fluctuations which extend over short spans of years: cyclical fluctuations. The causes of these cycles are discussed and the consequences which result and way in which to mitigate these consequences with regard to social well-being are examined. Although Pigou’s approach went out of fashion following Keynes, it is similar in spirit to much of the late twentieth-century work stimulated by real business cycle theory.
Part 1: Causation 1. The Problem 2. The General Characteristics of Industrial Fluctuations 3. Impulses from the Side of Resources 4. Real Impulses Behind Varying Expectations of Profit from Industrial Spending Among Business Men 5. Repercussions Not Through Psychology 6. The Structure of Modern Industry and Opportunities For Errors of Forecast 7. The Mutual Generation of Errors of Optimism and Errors of Pessimism 8. Autonomous Monetary Causes of Industrial Fluctuations 9. Instrumental and Consumption Trades 10. The Elasticity of Supply of Floating Capital 11. Repercussions in Respect of Floating Capital 12. Monetary and Banking Arrangements as a Condition Affecting the Operation of Non-Monetary Impulses 13. Creations of Bank Credit 14. Credit Creations and the Associated Real Levies 15. Factors Determining Price Changes 16. The Modification of the Terms of Past Contracts 17. The Reflex Influence of Price Movements on the Expectations of Business Men 18. Frictional Influences Connected with the Notion of Spoiling the Market 19. The Part Played by Rigidity in Wage-Rates 20. The Part Played by Imperfect Mobility of Labour 21. The Comparative Importance of Various Factors in Determining the Amplitude of Industrial Fluctuations 22. Rhythm or Periodicity Part 2: Remedies 1. Introduction 2. Remedies for the Several Non-Monetary Impulses to Industrial Fluctuations 3. A Tabular Standard for Long Contracts 4. Remedies Acting Upon Bank Credit Policy 5. Credit Rationing versus Discount Policy 6. A Discount Policy Directed Towards Price Stabilisation 7. Problems Connected with the Supply of Currency 8. Stabilisation versus the Gold Standard 9. Wage Policy 10. Direct Attacks on Industrial Fluctuations 11. Voluntary Action by Private Producers and Consumers 12. The Adjustment of Orders by Public Authorities 13. Fiscal Devices and Restrictions on Overtime 14. Relief Works 15. Short Time versus Unemployment 16. Insurance Against Unemployment Appendix: Statistical Tables