Early in the nineteenth century, analysts of fluctuations began to examine the role of "commercial moods" in the business cycle. By the second half of the century, economists sought the explanation for alterations in moods. William Stanley Jevons attributed such alterations to the periodic alteration in harvests due to sunspots. The "sunspot" cycle impinged on the economy both directly (as the harvest fluctuation altered aggregate demand), and indirectly (as the harvest fluctuation changed investors' expectations). By contrast, business-cycle theorists have recently developed theories of cycles in which "sunspots" refer to phenomena that, by themselves, do not affect the economy. However, as long as sunspots alter beliefs, cyclical economic effects result.
Copyright © 1997 From Business Cycles and Depressions: An Encyclopedia by David Glasner. Reproduced by permission of Taylor and Francis Group, LLC, a division of Informa plc.
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Glasner, David. "Sunspot Theories of Fluctuations." Business Cycles and Depressions: An Encyclopedia. New York: Garland Pub., 1997. 664-66. Print.