Vittorio Marrama

The article offers a review of modern business cycle theory as developed in the first half of XX century. Marrama analyses the extent of economic literature on these topics, pinpointing the main strands of thought and tools used by business cycle economists. The categorization is set forth according to the different methods adopted. Three of these categories are considered as the most important for understanding the current state of business cycle theory: cyclical aggregative models (using a deductive method only); econometrical aggregative models (deductive and inductive method); empirical researches (inductive method only). The A. shows how the increasing dissatisfaction both with the theoretical models formulated by post-keynesian economists and with empirical research on innumerable particular cycles as provided by the NBER group, was leading to a new synthesis centering on the building up of econometric models.