Intriguing pendula: founding metaphors in the analysis of economic fluctuations

The paper is an inquiry into the definition of the early econometric progra mme, namely into the discussions which Frisch and Schumpeter held in the ea rly 1930s about the most suitable model for representing innovations, chang e and equilibrium in economics. The argument and its framework are briefly presented in the first section. The 1931 correspondence between the two founders of the Econometric Society is discussed in the second section. It provides a magnificent example of t he importance of rhetorics in economics, of the heuristic role of constitut ive metaphors in a research programme and of the difficulties in defining t he most suitable mathematical formalism for dealing with cycles and structu ral change. The third section presents the conclusion of the story: the bif urcation between the resulting contributions made by Frisch (Propagation pr oblems and impulse problems in dynamic economics, pp. 171-205 in Koch, IC. (ed.), Economic Essays in Honour of Gustav Cassel, London, Frank Cass, 1933 ) and Schumpeter (Business Cycles, New York, McGraw, 1939; and the posthumo us volume, History of Economic Analyses, London, Routledge, 1954). Finally, the fourth section presents an alternative epilogue, highlighting some of the hidden implications of these verbal accounts of pendula as the founding metaphor for business cycles. The paper is based upon as yet unpublished papers that were found in Frisch 's Collections (Oslo Universiry Library and Frisch's Rommet at the Institut e of Economics) and Schumpeter's Collection (Harvard University).