The Meteorological Theory was presented by economists W.S. Jevons and H.L. Moore. “Trade cycle takes place due to the factors originating from outside the economic system”, say these two economists, “and that it directly influences the internal / economic factors”. Such factors are e.g. a change in the weather i.e. cyclones, rainfall, drought etc.

In keeping with this theory another economist i.e. Prof. A.C. Pigou added “Harvest variations occupy a significant place among the impulses behind industrial fluctuations; good harvest tending to promote expansions and bad harvests result in contractions of industrial activity.”

W.S. Jevons says that, “Sunspots appear on the sun due to which the weather becomes very bad, harvest are adversely affected, industrial expansion is retarded and the economy contracts. Whereas in the absence of the sun-spots the weather becomes good and harvests are better and industrial expansion brings expansion in the economy.”

According to H.L. Moore, “Planet Venus comes in between the sun and the earth after every light years due to which the flow of electrons from the sun is retarded and the weather is adversely affected which results in the harvests and industrial expansion becoming bad, and hence it leads to depression; but after that weather becomes normal and the whole situation is better once again.”

Economic fluctuations that occur have been totally ignored in this theory. Such fluctuations take place through real economic factors and not external factors. Nobody can say that depression in the economy will take place exactly every light years. Such an assumption is inadequate because it cannot be justified by facts; but merely predicted. This theory is confined to agricultural countries whereas the industrial countries also experience trade cycle upon which the meteorological theory does not apply.