Analysing American and English interest rates and other data, Kitchin found evidence for a short business cycle of about 40 months.
[1] His publications led to other business cycle theories by later economists such as Nikolai Kondratieff, Simon Kuznets, and Joseph Schumpeter.
The Kitchin cycle is believed to be accounted for by time lags in information movements affecting the decision making of commercial firms.
Firms react to the improvement of commercial situation through the increase in output through the full employment of the extent fixed capital assets.
The demand declines, prices drop, the produced commodities get accumulated in inventories, which informs entrepreneurs of the necessity to reduce output.