Money supply fluctuations drive real output changes in economic cycles.
The article discusses how changes in the amount of money in circulation can affect the economy and lead to fluctuations in business cycles. Some economists believe that increasing the money supply can boost real demand and output, while decreasing it can have the opposite effect. Different theories exist on how exactly this happens, with some focusing on market imbalances and others on rational expectations. Overall, the relationship between money supply and business cycles is complex and not fully understood.