Richard Kerschagl, Review of Walter Adolf Jöhr’s Die Konjunkturschwankungen (1956)

Richard Kerschagl’s review assesses Jöhr’s substantial contribution to business-cycle theory through a central tension: social psychology enriches causal explanation, but its inclusion weakens the calculability of economic processes. Moving from a survey of the field to an account of Jöhr’s method and then a critical appraisal, Kerschagl recognizes genuine innovation while questioning whether the book’s theoretical gains justify its scale.

The opening places Jöhr alongside the extensive studies of Haberler and Schumpeter. Kerschagl considers business-cycle research densely worked: disagreements concern economic policy more than fundamental theory. Between comprehensive planning and intervention confined to credit and fiscal policy, Jöhr seeks income stabilization and full employment compatible with a free market and relatively modest intervention. Detailed policy proposals are reserved for a subsequent volume.

Kerschagl follows Jöhr’s causal analysis from initiating impulses, including psychological influences, to structural factors that either reinforce fluctuations or facilitate expansion and contraction without being self-reinforcing. This leads to the book’s principal methodological claim:

Er ist, außerdem, der Meinung, daß eine mechanistische Erklärung des Kernprozesses nicht genügt, sondern zumindest auch eine sozialpsychologische Erklärung erforderlich ist.

English translation: He is, moreover, of the opinion that a mechanistic explanation of the core process does not suffice, but that at least a socio-psychological explanation is also required.

As Kerschagl reports it, Jöhr’s social-psychological approach explains irregularities and the flickering character of cyclical movement more economically than a complicated mechanistic model. Social-psychological partial models also offer a way to investigate particular historical expansions and downturns, although their concrete reconstruction cannot expose every causal relationship.

Kerschagl explicitly values the incorporation of psychology as an advance over earlier studies. His reservation concerns the explanatory gain’s methodological price:

Die Schwächen der Arbeit liegen vor allem darin, daß der Verfasser meines Erachtens nicht deutlich genug zum Ausdruck bringt, daß mit dem Einbau psychologischer Faktoren zwar die klarere Erforschung von Tendenzrichtungen möglich ist, daß dies aber ebenso zweifellos auf Kosten der Rechenbarkeit bestimmter Prozesse geschieht, beziehungsweise daß dadurch die übrigbleibende Rechenbarkeit meist nur eine ganz allgemeine und symbolische wird.

English translation: The weaknesses of the work lie above all in the fact that, in my view, the author does not bring out clearly enough that, while the incorporation of psychological factors does make possible a clearer investigation of the directions of tendencies, this just as undoubtedly occurs at the expense of the calculability of certain processes, or rather that thereby the calculability which remains mostly becomes an entirely general and symbolic one.

The distinction between identifying tendencies and calculating processes is the review’s sharpest conceptual move. Kerschagl does not reject psychological explanation; he asks that its limits be acknowledged. He also faults the treatment of money for neglecting newer research on economic structure and monetary function. Despite Jöhr’s movement away from earlier positions close to neo-Keynesianism, Kerschagl detects a continuing tendency to overvalue monetary factors.

The verdict remains appreciative but qualified: Jöhr has produced an important, learned work containing useful new directions. Yet Kerschagl’s closing return to the book’s bulk extends his criticism to the field as a whole. The review’s relevance lies in its insistence that explanatory novelty, calculability, and policy usefulness must be assessed separately—and that an imposing synthesis does not by itself establish proportionate theoretical progress.