Business Cycles and Their Manifestations in the World Economy during the 1980-1990's

Abstract

Fundamental changes have been taking place in the world, in both world political and economic fields. Behind these political changes there are a great changes in the world economy. The post-war period of economic miracle a rapid cyclical-free growth is over. The great optimism that the capitalist market economy will grow continually disappeared. A turning point occurred in the world around 1974 with the reappearance of the recessions, declines in industrial production. There were economist who argued that these cyclical movement is not similar to the crisis in 1928/32, entirely different this is only structural and management in character. This is not true. Not only some industrial sectors (steels, textile etc.) declined but the whole industry. There were opinions that this crisis due to government intervention, that is management crisis, so the solution is privatisation. This again not true. Government great role was one of the causes of economic miracles in an earlier period. Very important issue is the real cause - or causes of recession. There are many theories of this but the majority remain on the surface, list accidental causes, which do play certain part but not the decisive. Nowadays more and more statistical information show that huge quantity of goods produced, with less and less labour, using robots. There are differences as well as similarities between the 1928/32 (old) recession and the 1971-80's (new) recessions. The similarities appear in the manifestations which characterise every recessions. The main manifestation is the-sudden decline in industrial production. This decline was deeper (40-50%) during the old recession while only around 5=10% during the new ones. There were 3 recessions 1974/1975, 1980/1982, 1990/1993 - when industrial decline occurred.