Economic Cycle Math

Abstract

In this short paper I would like to present a rigorous mathematical and yet heuristic description of modelling the economic cycles. The idea behind the cycles is that its dynamics could be decomposed into oscillation of two wave functions with low frequency (long-term cycle) and high frequency (short-term cycle). Finding the solution/s for these equations will be done with a use of a simple trigonometric functions such as sin⁡wt and cos⁡wt that lie at the heart of the wide amount of physical processes from Newtonian to quantum mechanics. Ultimately, we arrive at the energy equation – that is a driving force of this process.

Keywords: economic cycle, superposition of harmonic functions, wave frequencies, energy integral

JEL Classification: C02, E30, G01