Customer Reviews

Recessions and Depressions: Understanding Business Cycles

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I'm TA in macroeconomics. My master thesis was regarding business cycles.

The book explains some basic issues regarding business cycles for undergraduate students. Knoop insists on non-technical language, which makes text easy to read, but sometimes lack of some basic mathematics makes some parts confusing. Personally, I think that undergraduate students can handle some basic math. Especially, part on business cycle forecasting is pointless without some mathematical approach. I wouldn't recommend it as a basic literature, but as an aditional one. Also, graphical analysis is quite poor, but I realy like a lot of graphs which explain main text in more details.

The strongest part of the book are case studies which consolidate business cycles theories. Three points are common for all analyzed recessions: (1) they have international character, (2) they are followed by financial and banking crisis and (3) all analyzed recessions are connected with some economic policy mistake. Case studies are very suitable way for explaining complex issues regarding business cycles. However, introduction to main concepts of business cycles, such as lead/lag variables or stylized facts, isn't very well done. Partly because of lack of graphs, which could make some terms more understandable.

My personal objection is that book doesn't follow model-building approach, such as Williamson's (2011) 'Macroeconomics'. Of course, these are completly different types of books/textbooks. So, for beginers in business cycle research I recommend combination of these two texts.

Besides Knoop's, you could also consider Niemira and Klein (1994) 'Forecasting financial and business cycles', or 'Business cycle theory' by A. Lutz (2002).

RECESSIONS AND DEPRESSIONS: UNDERSTANDING BUSINESS CYCLES appears in its second updated edition to offer expert surveys of basic business cycle theories and the latest research on market failures in the aftermath of the events of 2008. These events sparked an extensive update here, offering clear explanations of business cycle theories and how they apply in light of the latest crisis. College-level business libraries need this.