Joseph Kitchin (1861–1932) was a
British
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* British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies.
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businessman and
statistician. Analysing American and English
interest rates and other data, Kitchin found evidence for a
short business cycle of about 40 months.
His publications led to other business cycle theories by later economists such as
Nikolai Kondratieff,
Simon Kuznets, and
Joseph Schumpeter
Joseph Alois Schumpeter (; February 8, 1883 – January 8, 1950) was an Austrian-born political economist. He served briefly as Finance Minister of German-Austria in 1919. In 1932, he emigrated to the United States to become a professor at H ...
.
The Kitchin cycle is believed to be accounted for by time lags in information movements affecting the decision making of commercial firms. Firms react to the improvement of commercial situation through the increase in output through the
full employment of the extent fixed capital assets. As a result, within a certain period of time (ranging between a few months and two years) the market gets ‘flooded’ with commodities whose quantity becomes gradually excessive. The demand declines, prices drop, the produced commodities get accumulated in inventories, which informs entrepreneurs of the necessity to reduce output.
However, this process takes some time. It takes some time for the information that the supply exceeds significantly the demand to get to the businessmen. Further, it takes entrepreneurs some time to check this information and to make the decision to reduce production, some time is also necessary to materialize this decision (these are the time lags that generate the Kitchin cycles). Another relevant time lag is the lag between the materialization of the above-mentioned decision (causing the capital assets to work well below the level of their full employment) and the decrease of the excessive amounts of commodities accumulated in inventories. Yet, after this decrease takes place one can observe the conditions for a new phase of growth of demand, prices, output, etc.
[See, e.g. Korotayev, Andrey V., & Tsirel, Sergey V]
A Spectral Analysis of World GDP Dynamics: Kondratieff Waves, Kuznets Swings, Juglar and Kitchin Cycles in Global Economic Development, and the 2008–2009 Economic Crisis
''Structure and Dynamics''. 2010. Vol.4. #1. P.3-57.
References
External links
*
1861 births
1932 deaths
English businesspeople
{{England-business-bio-stub