A recent contribution to trade cycle theory

Abstract

The article is a critical review of the new book A Contribution to the Theory of Trade Cycle by J. R. Hicks. Placing Hicks’ theory in direct line of decent from Harrod’s dynamics, in its economics, and from Frisch and Samuelson, in its technique, the Author calls attention first of all to the shortcomings in Harrod’s dynamic model and goes on to examine the more realistic Hicksian model. Yet emphasising that Hicks’ work represents a very real advance in many individual points of dynamic theory, the author is led to conclusion that it does not quite add up to a satisfactory theory of the trade cycle, especially because of its failure to distinguish clearly between supply and demand conditions and an overly mechanical use of different equations based on constant coefficients.