Presents the empirical data of business cycles and the theories that economists have developed to explain and prevent them, and considers case studies of recessions and depressions in the United States and internationally.

It is well known that movements in lending rates are asymmetric; they rise quickly and sharply, but fall slowly and gradually. Not known is the fact that the asymmetry is stronger the less developed a country's financial system is. This new fact is here documented and explained in a model with an...