The majority of the economic oscillations which we encounter seem to be explained most plausibly as free oscillations.

[The] length of the cycles and the tendency towards dampening are determined by the intrinsic structure of the swinging system, while the intensity (the amplitude) of the fluctuations is determined primarily by the exterior impulse. An important consequence of this is that a more or less regular fluctuation may be be produced by a cause which operates irregularly.

Actual economic systems are constantly subjected to change and disturbances, which would result in irregularity.

We must give the system sufficient factors of stability to enable it to work; but we must not assume that these forces are so powerful as to prevent the system from being liable to fluctuations. There must be a tendency to rigidity of certain prices, particularly wage-rates; but there must also be a tendency to rigidity of certain price-expectations as well, in order to provide an explanation for the rigidity of these prices... Indeed we should do better to assume a good deal of variation in different people’s elasticities of expectations... Of course the way in which a population is divided with respect to this sort of sensitivity will vary very much in different circumstances... We have to be prepared to deal with a range of possible cases, varying from that of a settled community, which has been accustomed to steady conditions in the past (and which, for that reason, is not easily disturbed in the present), to that of a community which has been exposed to violent disturbances of prices (and which may have to be regarded, in consequence, as being economically neurotic.

drop the economist’s beloved notion of ‘externalities’, those incidental effects felt by people who were not involved in the transactions that produced them — such as toxic effluent that affects communities living downstream of a river-polluting factory, or the exhaust fumes inhaled by cyclists biking through city traffic. Such negative externalities, remarks the ecological economist Herman Daly, are those things that ‘we classify as “external” costs for no better reason than because we have made no provision for them in our economic theories’.21 The systems dynamics expert John Sterman concurs. ‘There are no side effects — just effects,’ he says, pointing out that the very notion of side effects is just ‘a sign that the boundaries of our mental models are too narrow, our time horizons too short’.

The topic that I have attempted to explore is the usefulness of these notions of the engineer, about feeds-back, harmonic components and the like, in application to the analogous problems of economic fluctuation and economic regulation.

The separate excitation of the dynamo corresponds with the independently determined investment in the economic model, and the total excitation with income. Perhaps in this electrical age, the conventional metaphor of ‘priming the pump’ might be dropped in favour of ‘exciting the dynamo’.

the cycles of risk taking in the economy as following a pattern: stability and absence of crises encourage risk taking, complacency, and lowered awareness of the possibility of problems.

"But if all behaviour, without exception, thus implies an energetics or an "economy", forming its affective aspect, the interaction with the environment which it instigates likewise requires a form or structure to determine the various possible circuits between subject and object."

In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magnifies the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback – increasing returns – makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the “best” one.

Market power and externalities are examples of a general phenomenon called market failure—the inability of some unregulated markets to allocate resources efficiently. When markets fail, public policy can potentially remedy the problem and increase economic efficiency. Microeconomists devote much effort to studying when market failure is likely and what sorts of policies are best at correcting market failures. As you continue your study of economics, you will see that the tools of welfare economics developed here are readily adapted to that endeavor. Despite the possibility of market failure, the invisible hand of the marketplace is extraordinarily important.

Thus, even with relatively heavy damping such shocks generate fairly regular cycles.
The result is of considerable importance.

Despite the beliefs and teachings of religion and psychology, impulses are biological and psychic directional signals to nudge the individual toward his or her greatest opportunities for expression and development privately, and also to insure the person's contribution to mass social reality.

The economy is a nonlinear fractal system, where the smallest scales are linked to the largest, and the decisions of the central bank are affected by the gut instincts of the people on the street.