Business Cycles

NI

Pa t h
Steady

Time
NI Roy Harrod

Steady Path Ga = Gw = Gn

Also called the ‘Knife-Edged Path’ Pa t h

Ste ady

Unsteady Path Ga (Not =) Gw (Not =) Gn

(Ga > Gn) OR (Ga < Gn)

This gives rise to Business fluctuations

Time
NI
B = Bust

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D = Depression

Time