Review of Theoretical Aspects of the Business Cycle
The course of economic processes is characterised by changes in the level of activity, which affect all aspects of economic activity. Waves of recovery and recession are inscribed in the biography of every economy, regardless of the socio-economic system in place. The origin and mechanism of these changes are the result of a variety of factors (economic and non-economic, endo- and exogenous), which are characterised by a different course over time. Economic activity, in other words the economic situation, is subject to constant fluctuations, and these in turn, being complex processes, are subject to transformations caused by the economic, political or social factors that determine them. It is difficult to imagine an economy that would develop at a uniform rate. Studies of the degree of activity of various economies show that economic development is subject to recurring fluctuations in development dynamics with some regularity. It might seem that economic development1 is a natural process. However, historians claim that from the decline of the Roman Empire until the 17th century, production did not grow. Economic development is therefore .the child of capitalism. But capitalism did not satisfy parts of society because it brought with it inequality and did not provide a sense of security. Besides, economic growth was not stable, its average annual rate fluctuating between 1.5 and 2.0 per cent. Classical economics (A. Smith, D. Ricardo) proclaimed that capitalism was the best of everything people could have. K. Marx, on the other hand, considered capitalism the greatest misfortune of mankind. The Great Depression of 1929.1934 reinforced the belief in the rejection of capitalism. It was then that J. M. Keynes made the harsh diagnosis that an unfettered market would push economies into deep and prolonged recessions. The prescription for such a state is the state, which must take on the burden of regulating the economy and, above all, controlling demand. The idea of the welfare state triumphed. After the Second World War, the golden age of capitalism dawned.
