Business Cycles

“Business Cycles” by Warren F. Hickernell is a foundational and exceptionally systematic exploration of how economies expand, peak, contract, and recover. Written by a scholar who served as Director of the Bureau of Business Conditions at the Alexander Hamilton Institute, this work stands as one of the clearest pre-Keynesian explanations of cyclical behavior in trade, credit, and financial markets.

Hickernell demonstrates that business cycles are not random events but patterned fluctuations driven primarily by the flow of loanable funds, the expansion and contraction of credit, and the relationship between banking reserves and commercial activity. He explains how prosperity builds through abundant credit, how crises emerge when borrowing pressures exceed capacity, and how depressions resolve as liquidity accumulates back into the banking system.

The author also separates the normal cycle—the predictable, structural forces—from cross-currents, including gold production, paper money, crop variability, and unsound banking practices, which distort timing and intensity. Through rigorous analysis, historical case studies (1720–1921), and clearly defined principles, Hickernell delivers a methodology for forecasting cyclical turns using practical barometers: bank reserves, interest rates, imports/exports, commodity prices, foreign exchange, and the behavior of central banks.

This volume remains an essential resource for traders, financial analysts, and macro-oriented investors who want to understand the deeper structure behind market expansions and contractions.

✅ What You’ll Learn:

• How business cycles evolve through four distinct phases.
• The role of loanable funds as the driving engine of expansions and contractions.
• How bank reserves, interest rates, and credit conditions predict cyclical turning points.
• How to interpret statistical indexes such as bank clearings, imports, exports, and commodity prices.
• The underlying mechanics of the “normal cycle” and how it becomes distorted.
• The impact of gold production, paper money, and banking policy on long-term economic direction.
• How to evaluate cross-currents that modify or delay cyclical movement.
• Historical patterns of panics from 1720–1921 and the forces that triggered them.

💡 Key Benefits:

• Provides a clear, logically structured framework for reading macroeconomic cycles.
• Offers practical forecasting tools rooted in monetary and credit dynamics.
• Helps traders and analysts anticipate economic turning points with greater confidence.
• Delivers timeless lessons on how financial systems respond to expansion, strain, and correction.
• Deepens understanding of how markets align with—or diverge from—actual economic conditions.

👤 Who This Book Is For:

• Intermediate to advanced market practitioners seeking macroeconomic depth.
• Investors who want to anticipate risk cycles, credit shifts, and liquidity changes.
• Analysts studying financial history, monetary systems, or business cycle theory.
• Traders who rely on long-term economic context for asset allocation.
• Students of classical economic reasoning and early financial forecasting.

📚 Table of Contents:

• The Cycle Described
• Outlining the Problem
• Selecting an Index of the Business Cycle
• The Normal Cycle
• The “Cross-Currents”
• Resume of History of Panics

Business Cycles By Warren Fayette Hickernell