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Abstract: Why do we have recession?
The cause of recession is explored using a thought experimentabout the smallest economic unit capable of experiencing recessions.This is characterised as a trading village. The paper argues thatrecession is triggered by inadequate or poorly judged adaptation toever-changing market conditions. A computer simulation of the modelis proposed to determinewhether the drift into recession is gradual or subject to a tipping point.

Recession - Why Do We Have Recessions?

By Jack Calverley 1st January 2002

[Recession forum][Recession model on computer][Buy this paper online $9]

1. A context for the question
2. What kind of a theory?
3. Obstacles to a theory
4. Content for a theory
5. Reframing the question
6. A thought experiment
     6.1 The economic unit
     6.2 Shortage of work
     6.3 Natural disaster
     6.4 Trading from surplus
     6.5 Trading through need
     6.6 Inter-village trading
     6.7 Trade value
     6.8 Individuation
     6.9 Why do we have recessions?
7. Validity of the theory
     7.1 Kind of theory
     7.2 Self-consistency
     7.3 Relation to conventional measures
     7.4 Support for the theory
     7.5 Computer modelling
8. Objections to the Mark I Theory

1. A context for the question

The question why do we have recession? invites two causal components:"What starts the process that leads to a recession?" and "How does that process deliver recession?"

Given a rich enough view, the world can be thought of as a multitude ofthings and stuffs which interact with one another - be they atoms, people,household goods, countries or oceans - and we rely on parts of this multitudewhen we describe the world.

Our descriptions are sometimes specific "The temperature at the North Poleat noon on 1st June 2001 was -10 degrees Celsius" and sometimes general"The temperature at the North Pole never exceeds 5 degrees Celsius."Sometimes they are vague "Arctic regions are cold."

We describe parts of the world that are useful to our purpose - relevant to our thinking and communication. But it makes a difference to ourthinking how we describe those parts we pick out.

A specific description might be an observation. A general statementmight be a law which in turn encapsulates a theory. A vague statementmight present a family of possible scenarios.

If our discourse is about recessions, what are the proper things andstuffs of that discourse - and why?

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Copyright (c) 2002 Jack Calverley. All rights reserved.