From time to time after a long expansion, a few feel emboldened enough to suggest that perhaps we have seen the end of the business cycle. This happened in the very early-1970s, and a few people are canvassing the idea now as part of the concept known as the “new economy” or “new paradigm”.
While there is undoubtedly substance in these ideas, some of you may be disappointed to know that I am not a member of the school that thinks the business cycle has been banished, although I am happy to recognise that increased productivity growth in the 1990s has made the task of macro-economic management somewhat easier than formerly.