Intriguing Pendula: Founding Metaphors in the Analysis of Economic Fluctuations
Posted: 22 Sep 2001
The paper is an inquiry into the definition of the early econometric programme, namely into the discussions which Frisch and Schumpeter held in the early 1930s about the most suitable model for representing innovations, change and equilibrium in economics.
The argument and its framework are briefly presented in the first section. The 1931 correspondence between the two founders of the Econometric Society is discussed in the second section. It provides a magnificent example of the importance of rhetorics in economics, of the heuristic role of constitutive metaphors in a research programme and of the difficulties in defining the most suitable mathematical formalism for dealing with cycles and structural change. The third section presents the conclusion of the story: the bifurcation between the resulting contributions made by Frisch (Propagation problems and impulse problems in dynamic economics, pp. 171-205 in Koch, K. (ed.), Economic Essays in Honour of Gustav Cassel, London, Frank Cass, 1933) and Schumpeter (Business Cycles, New York, McGraw, 1939; and the posthumous volume, History of Economic Analysis, London, Routledge, 1954). Finally, the fourth section presents an alternative epilogue, highlighting some of the hidden implications of these verbal accounts of pendula as the founding metaphor for business cycles.
The paper is based upon as yet unpublished papers that were found in Frisch's Collections (Oslo University Library and Frisch's Rommet at the Institute of Economics) and Schumpeter's Collection (Harvard University).
Keywords: Frisch, Schumpter, pendulum, cycles, complexity
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