Oditor, No. 08/2014

ECONOMIC CYCLE IN THE CONTEMPORARY MARKET ECONOMY SYSTEM
prof. dr Bogdan Ilić[8]

UDC: 338.12
COBISS.SR-ID 214286604

Abstract

Until the Great Depression from 1929 to 1933. year that shook the whole world, the economy is dominated by the view that the invisible hand of the market will balance the supply and demand of goods and services and respond to the question of what, for whom, and how to produce. It was believed that state intervention in economic life only hinders the economy and that is harmful, that leads suboptimal solutions, ie, increasing costs and prices, reducing demand, production and employment. However, the randomness of the market in terms of growing centralization and concentration of capital on the basis of technological progress has led to an ever deeper crisis and disorder of social reproduction. Buy and freedom model economy are becoming more chaotic and can not be controlled, and the macroeconomic growth was not satisfactory.

Key words: cyclical movement of the economy, the economic crisis, overproduction, state intervention.

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[8]Bogdan Ilić Ph.D., Professor emeritus, University of Belgrade, Faculty of Economics, Kamenicka no. 6, Belgrade, Serbia.