Money and business cycle Nezar Al-Musallam 200801234 Section: 102

Outline Money and business cycle history Business cycle model Causes of the cycle Graphs References

Money and business cycle history They were considered as theories since they only give little roles to change the money stock. Economists give money to change the central role to a particular theory of the cycle.

Money and business cycle history Stocks are rising in the expansions and cyclical contractions.

Graph The graph shows how the stocks arose from the year 1867 to the year 1960

Graph The graph shows how stocks arose during both cyclical expansions and cyclical contraction between the years 1873 to 1937.

Business cycle model This model can have real effects of the money that arises from the financial market. It can lead to success as well to failures. These kind of models can perform poorly when communicating between the real nominal interests rate.

Causes of the cycle Changes in capital where the economy is strong Economy reaches at its highest Imitation The loan policies of commercial banking External shocks

Graphs

References Friedman,M; Schwartz,A (1965). Money and Business Cycles. The State of Monetary Economics. Taken from: http://www.nber.org/chapters/c5179.pdf King, R ; Watson, M (1995). Money, Prices, Interest Rates and the Business Cycle. Taken from:http://www.princeton.edu/~mwatson/papers/mpibc_wp2.pdf Social Studies (2012). The Business Cycle. Taken from: http://www.socialstudieshelp.com/eco_business_cycle.htm