This paper presents a new perspective on the generating mechanism of the business cycle. In the new perspective the economic system has a stable equilibrium and gives rise to undulatory processes with the help of small disturbances. But a certain once-and-for-all shock can trigger a persistent periodic oscillation. This corresponds to the case of a hard generation oscillation in the dynamical systems theory. It is shown that a subcritical Hopf bifurcation is useful to explain such a phenomenon. Existing business cycle models can be reinterpreted in the new perspective. As examples of application Kaldor's model and Benassy's model are considered.

This paper investigates the political business cycle when interest group pressure on fiscal policy is incorporated. Two cases are investigated; one in which only autonomous investment is included and one in which a Kaldor-type induced investment function is incorporated. In both cases chaotic fluctuations can emerge even when the politically motivated fiscal ''forcing term'' is fairly small.

We investigate thoroughly Schinasi's business cycle model, a disequilibrium IS-LM model augmented by a government budget constraint, in the case of pure money financing. The model has the two- and three-dimensional versions. For the former case, we prove rigorously the existence of limit cycles by the Poincaré-Bendixson theorem and show that three variables of the model, money supply, output and interest rate, correspond to the leading, coincident and lagging indicators of the usual business index, respectively. For the latter case, closed orbits are considered by the Hopf bifurcation theorem and imagination. Finally, the results obtained in the two- and three-dimensional cases are compared. © 1994.

On the basis of Olech's theorem we derive conditions on which any solution path starting from an arbitrary initial point in a two-dimensional bounded region ultimately converges to a unique equilibrium point without escaping from the region during a transition period. Then, using the result, we render one proposition more exact from the economic point of view.