Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277054 
Authors: 
Year of Publication: 
2005
Citation: 
[Journal:] Intervention. Zeitschrift fuer Ökonomie / Journal of Economics [ISSN:] 2195-3376 [Volume:] 02 [Issue:] 2 [Year:] 2005 [Pages:] 77-105
Publisher: 
Metropolis-Verlag, Marburg
Abstract: 
For the last quarter of a century, the Real Business Cycle model has dominated the interpretation of business cycles in mainstream economics; yet a number of significant empirical objections to it justify exploring an alternative approach. This paper proposes to base such an approach on a predator-prey mechanism, along the lines of the classical Lotka-Volterra model for ecosystem dynamics, where agency costs play the role of the predatory activity, in a process very similar to the one proposed by the classical Austrian School interpretation of the cycle (Hayek/Schumpeter). The model is consistent with both Rational Expectations and the Efficient Markets Hypothesis, and predicts that stock market valuations will regularly present bubbles and crashes synchronised with the business cycle without this implying any irrational behaviour on the part of the investors.
JEL: 
E32
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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