The construction cycle, cause or effect of business activity?
Ernst, Harry B.
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Three hypotheses may be advanced in regard to the relationship of the building or construction and the overall business cycle. The first is that the building cycle is an "early mover," tends to "lead" business activity, and because of this, may be ascribed as being of the nature of a cause. A second is that the building cycle is a consequence of and directly linked to the rises and falls of business and is a function of the National Income. If this postulation be true, the building cycle would tend to "lag" and be of the nature of an effect. The third, following logically from the first two, is that if there is no cause or effect relationship between the two cycles, perhaps there is no connection at all and each may exert its characteristic movements, independently of the other. It is admitted that more propensities to "lead" and "lag" do not guarantee principles of causation nor effect, but if one cycle habitually proceeds or follows the other, at least a tendency toward these former principles may be deduced. Such reasoning provides the foundation of the thesis.
Thesis (M.A.)--Boston University, 1951