He brought insights on the causes of economic crises and conducted research on the balance of payments and money.
(1832-1885) French economist. He developed the theory of "acceleration". Born in Bulgaria, Ruse, died in Chambery, France. He was a professor at the Paris Law School. He brought insights into the causes of economic crises and conducted research on the balance of payments and money. In his book Les crises periodiques de surproduction (“Periodic Overproduction Crises”), published in 1911, he put forward a theory of crisis that brought insights into business cycle fluctuations. According to Aftalion, when the demand for consumer goods increases, it is not possible to reach the production capacity to meet this demand in a short time. The production of sufficient means of production to reach the required production capacity depends on technical conditions. Once this is achieved, an increase in the supply of consumer goods begins and continues until the goods provide less and less marginal benefit to the consumer. Overproduction occurs when the increase in production exceeds the demand for consumer goods. Low demand prevents the setting of high prices that will generate profits. Investments stall. New investments can only be made when the production capacity decreases as a result of the wear of the means of production. After this stage, the same conjuncture reappears and the events are repeated.
According to Aftalion, the conjuncture changes in production are much larger in industries producing investment goods than in other industries. While evaluating the overproduction, Aftalion accepted the views of Jean-Baptiste Say and Ricardo that each production creates a total market equivalent to its own value for another production. To prove that overproduction is possible, however, he used the concept of falling marginal utility. According to the acceleration theory developed by Aftalion, the new net investment amount in a given year is determined by multiplying the changes in consumer expenditures of the previous year by the capital product coefficient. Aftalion studied acceleration theory together with crisis theory.
WORKS:
Les crises periodiques de surproduction, 1911, (“Periodic Overproduction Crises”);
Les fondaments du socialisme, 1922, (“The Foundations of Socialism”);
La valeur de la monnaic dans I'economie contemporaine, 1948, (“The Value of Money in the Contemporary Economy).