Business cycles

This thesis presents a theoretical behavioral model that deals with the expansionary phase of the business cycle. Its purpose was to provide a plausible explanation for growth out of recession. In this model, expansionary output is directly related to investment, saving, and the expected returns to capital. Moreover, it is assumed that capital formation is inversely related to the interest rate, which serves as the independent variable with respect to investment, production, saving, and expected returns. In addition, the basic model is linked to the combined influence of fiscal and monetary policy through the use of a coefficient. This coefficient can alter the fundamental dynamic of the growth path. Finally, the four basic non-linear curves that compose the behavioral model are compared to curves suggested by scatter diagrams. In conclusion, there seems to be some conformity of statistical reality to the non-linear relationships described by the behavioral model, as well as general agreement with a large body of existent theory.

The present work uses statistical mechanics tools to investigate the dynamics of markets, prices, trades and wealth distribution. We studied the evolution of market dynamics in different stages of historical development by analyzing commodity prices from two distinct periods : ancient Babylon, and medieval and early modern England. We find that the first-digit distributrions of both Babylon and England commodity prices follow Benford's Law, indicating that the data represent empirical observations typically arising from a free market. Further, we find that the normalized prices of both Babylon and England agricultural commodities are characterized by stretched exponential distributions, and exhibit persistent correlations of a power law type over long periods of up to several centuries, in contrast to contemporary markets. Our findings suggest that similar market interactions may underlie the dynamics of ancient agricultural commodity prices, and that these interactions may remain stable across centuries. To further investigate the dynamics of markets, we present the analogy between transfers of money between individuals and the transfer of energy through particle collisions by means of the kinetic theory of gases. We introduce a theoretical framework of how micro rules of trading lead to the emergence of income and wealth distribution. Particularly, we study the effects of different types of distribution of savings/investments among individuals in a society and different welfare/subsidies redistribution policies. Results show that while considering savings propensities, the models approach empirical distributions of wealth quite well. The effect of redistribution better captures specific features of the distributions which earlier models failed to do. Moreover, the models still preserve the exponential decay observed in empirical income distributions reported by tax data and surveys.

This dissertation explores how local government policies affect pre-and postdisaster business resilience, in the context of institutional and neo-institutional frameworks. The study builds on past research on business vulnerability and resilience to examine government policies in the pre-disaster and response and recovery periods, and explore how government responses of varying types can contribute to different outcomes for local small businesses in the recovery period following hurricane disasters. The project examines two cases surrounding events in 2005 and their impact on business resilience: Hurricane Katrina and its effects on the New Orleans metropolitan area; and Palm Beach County's experience with Hurricane Wilma. The dissertation involves a mixed-method approach to the subject matter. The statistical analysis portion uses multiple regression analysis of surveys of government-registered business owners in the affected areas. Business resilience is examined in light of the p redictive power of the size of the disaster; the influence of the institutional policies in public procurement, and vii economic development through small business programs; the role of institutional culture; and finally business vulnerability. The interview portion involves interviews with public officials, and coding and analysis of the field texts of these discussions, for additional information about the role that institutions play in the resilience of businesses before and after disaster. The statistical results suggest that institutional culture; size of disaster, institutional policies (particularly in procurement practices), and vulnerability can play a role in determining the resilience of a local business community.