Today’s Economic History: John Maynard Keynes on the Trade Cycle
…is mainly due to the way in which the marginal efficiency of capital fluctuates…. By a cyclical movement we mean that as the system progresses in, e.g., the upward direction, the forces propelling it upwards at first gather force and have a cumulative effect on one another but gradually lose their strength until at a certain point they tend to be replaced by forces operating in the opposite direction… until they too, having reached their maximum development, wane and give place to their opposite…. [And] the substitution of a downward for an upward tendency often takes place suddenly and violently, whereas there is, as a rule, no such sharp turning-point when an upward is substituted for a downward tendency….