Cycle Theory - France Economics

Cycle Theory, Economic History Of France

French thought, however, has made important contributions to business cycle theory. As in other nations, this aspect of the economic theory became of special interest after World War I, when the importance of credit currency was emphasized and the significance of savings in connection with capital formation attracted special attention.

C. Juglar's work on Crises in 1860 was a pioneer in this field. The next important figure among French economists was Aftalion, who in 1911 published a work which emphasized the effect of increasing production on the desire factor in demand as the cause of business cycles. He dwelt on technical conditions as affecting the creation of capital goods, and was one of the earliest to discover the idea of "acceleration." Next came Francois Simiand who contributed a notable theory of long period cycles consisting in secular movements of prices apparently caused by changes in the supply of money. Simiand makes the point that the downswing which began in 1930 is of major importance because it coincides with the beginning of one of his periods of long decline.

Ansiaux (b. 1869; Belgian) deserves mention here for his treatment of the relation between credit inflation and crises. Writing in 1934, his thought shows the effect of the period, by going back of capital to savings. F. Divisia in 1928 further developed the idea of saving in connection with cycles and emphasized invention as a factor.2 Others who deserve mention are Lescure, Dupriez, and Nogaro.

A characteristic feature of much of the French cycle theory, especially in Simiand and Divisia, is the adoption of a rather rigid "positivism" which restricts the thinker to observation and induction.