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The metaphorical characterization of equilibrium, economic crises, and business cycles

English title The metaphorical characterization of equilibrium, economic crises, and business cycles
Applicant Baranzini Roberto
Number 169900
Funding scheme Project funding (Div. I-III)
Research institution Centre Walras-Pareto Faculté de droit Université de Lausanne
Institution of higher education University of Lausanne - LA
Main discipline Economics
Start/End 01.09.2017 - 31.08.2020
Approved amount 526'694.00
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All Disciplines (2)

Discipline
Economics
General history (without pre-and early history)

Keywords (6)

Business Cycles; Economic Crises; Equilibrium; History of Economics; Metaphors; XIXth Century

Lay Summary (French)

Lead
De leurs premières occurrences jusque dans la littérature contemporaine sur les subprimes, les crises sont décrites à l’aide de métaphores, dont les plus fréquentes sont relatives aux catastrophes naturelles (tremblements de terre, tempêtes entrainant les acteurs dans leurs tourbillons), au domaine médical (maladies du système économique) ou à certaines expériences physiques (oscillations d’un pendule).
Lay summary

« All businesses fluctuate. The wise man swings on the pendulum of trade; the fool knocks his head against it. » (Anon, 1894)

Les métaphores, tout comme les autres figures de rhétoriques, témoignent d’une attention qui va au-delà de l’ornement stylistique : elles sont des moyens de penser les objets. Les métaphores sont des outils de recherche en ce qu'elles aident le théoricien à comprendre son objet (la crise, dans ce cas) par les propriétés d'autres objets, qui sont mieux connus. Parfois, les métaphores permettent de mettre en lumière certaines hypothèses cachées, ou des points de vue qui ne sont pas explicites dans les modèles qui étudient la conjoncture.

Ce projet de recherche vise à explorer comment l'utilisation des métaphores a marqué la nature et le développement des théories des crises, vers la fin du XIXe siècle, au moment de la naissance de l'économie moderne. Les métaphores ont commencé à évoluer en concepts et en théories des cycles économiques en même temps que les théories de l'équilibre commençaient à être formulées en termes modernes. Le but de ce projet de recherche est de mieux saisir les notions d’équilibres et de crises, ainsi que leurs relations. Ce faisant, le projet entend également contribuer aux débats publics et professionnels actuels sur les crises, un sujet qui se présente bien souvent sous forme technique, mais dont les ressorts essentiels tiennent à des images déjà utilisées il y a plus d’un siècle : les problèmes économiques fondamentaux seraient-ils restés les mêmes ?

Direct link to Lay Summary Last update: 31.01.2017

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Abstract

The recent financial and economic crisis has brought to the fore the difficulties current economics has in explaining -let alone forecasting- such events. Some economists reacted by arguing the case for alternative approaches, drawing in particular on Marxist and Keynesian ideas. Instead, our proposal takes a historical perspective: we want to inquire into the reflection on crises at the time of the shaping of modern economics, namely towards the 1870s when the ‘marginalist revolution’ in economics took place. This was also the time when crises theories started to be recast in terms of theories of the business cycle. Our aim is to examine the theoretical paths that have been followed and those that have been discarded in the actual historical development of the discipline, in order to enable an assessment of the potentialities that have been lost.The focus will be on the following problem. Economic crises have recurred at semi-regular decennial intervals during most of the 19th century. Economists and commentators have produced multiple explanations of the phenomenon, which was often interpreted as being caused by something breaking the equilibrium that characterizes the normal state of the economy. These writers therefore postulated the existence of a relationship between crises and equilibrium (or ‘normality’) which, however, was rarely specified in a precise manner.We aims at characterizing more precisely the nature of this relationship, as seen by different economic schools and within the main European national traditions in economics in the decades around 1870. Around that time, in fact, both the notions of ‘equilibrium’ and ‘crises’ began to change and acquire the features they have today. Economics started to be mathematized, and both these concepts began to be defined in mathematical terms. The transition took time, and some passages were not spelt out very precisely. We therefore want to circumvent the problem of the insufficient specification of the main concepts by using a new approach: we propose to inquire into the metaphors used to express these concepts both in the academic and in the more popular literature, in French, German, English and Italian.The literature on metaphors stresses that the use of tropes transferring the properties of some object to another object does not fulfil only a purely ornamental function but serves different purposes: for instance illustrative (it conveys meaning by explaining something new by means of something with which the reader is more familiar), rhetoric (by persuading the reader by reference to a better established science), heuristic (by understanding an object by means of a comparison with another, or by transferring a selected set of properties from an object to another), analytical (by modelling an object in terms of another), or epistemological (by transferring to one process the kind of laws governing another one). We thus believe (also based on previous studies we have conducted) that the analysis of the metaphors used in our chosen context will reveal at a very deep level the views of our writers on crises, on equilibrium and on their relationships.Besides trying to resolve with a new method the history of economic thought problem of understanding the evolution of, and the relationship between, the notions of crises (later business cycles) and equilibrium and normality, we also think this approach will unearth some metaphorically formulated perspectives that have been discarded in the process of focusing on mechanical analogies but would perhaps enable both contemporary economists and the laypublic to look with different eyes at the problem of the economic crises that still affect our economies.
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