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The business cycle begins from a trough (lower level) and passes by means of a recovery section followed by a interval of expansion (higher turning level) and prosperity. After the height point is reached there’s a declining part of recession followed by a melancholy.
Many exponents of this idea point to the behaviour of banking system that causes diverges between money charge of interest and natural charge of interest. Nevertheless, as Keynes afterward emphasised, investment fluctuates quite often because of modifications in revenue expectations of entrepreneurs which relies on a number of financial and political components operating in the economic system. Thus, the idea fails to offer enough rationalization of enterprise cycles.
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