Trend and Cycle “■‘ L ^ 
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T-he concept^oif frend and cycle v arise in the statistical 
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analysis of time-series.They are separated ex post. 
Is there an economic meaning in these concepts 
which relates them to economic behaviour? Some such meaning 
is certainly presupposed in the theories of several authors 
Kalecki's pure business cycle, Harrods analysis of 
long term growht and cycle. The underlying economic idea 
seems to be this: 
The trend is a slow movement, non-reversible, the 
corresponding behaviour is based on long run perspectives 
("long run expectations") and perhaps also on long run 
memory. 
The cycle is a relatively quick movement, reversible, 
based on short run memory ( current or rather recent 
experience relating to profits etc ) and, it seems implied, 
short run perspectives. ( Short run is of course ntmeant 
in the Marshallian sense, but in the sense in which it is 
used in the discussion of the "^uglar cycle")', 
iwh 
N-ew -if these intuitive interpretations are accepted 
it becomes rather puzzling that many aufors from Aftalion 
to FRisch and Kalecki have regarded the trade cycle as 
essentially produced by fluctuations in fixed capital 
kst ~ 
investment. £n -faot_, we are inclined, with Keynes, to 
think of fixed investment as bs.sed on long run perspective, 
l 
and not merely on the spur of the current boom. And it 
looies- ail—irrational^, -if- - r§— is base^ on short run memory, 
i.e. on the current market data. 
One could imagine a variety of possible cnnclusions from