W. Stanley Jevon’s statistical study of periodicity has received much scrutiny (Aldrich1987), but less attention has been given to his theoretical position on economic fluctuations, a circumstance which T.W. Hutchison justly finds surprising considering that “Jevons maintained that aggregate instability, and the distress it caused, presented profoundly serious problems, and devoted some of his most strenuous economic research to their explanation” (Hutchison 1988, p. 6). This paper takes up the challenge to examine the development of Jevon’s though on economic fluctuations from the early 1860s until his death in 1882.
I shall distinguish in what follows between Jevon’s “theory of economic fluctuations,” i.e. his explanation for how sunspots cause fluctuations, and his study of periodicity which attempted to prove that periodic solar variation constituted the mechanism causing periodic economic fluctuations.1 My main concern shall be to highlight the less appreciated explanation for how sunspots are said to cause periodic economic fluctuations. In that regard, by 1875, expectations figured prominently in Jevon’s account: Harvest-generated fluctuations altered prices and then commercial “moods.” Consequently, investors altered investment decisions, thereby multiplying the direct effect of the harvest cycle.
Copyright © 1991 Cambridge University Press. This article first appeared in Journal of the History of Economic Thought 13 (1991), 243- 265.
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Peart, Sandra J. "Sun Spots and Expectations: W. S. Jevons and the Theory of Economic Fluctuations." Journal of the History of Economic Thought 13 (1991): 243-65.