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The Long Wave in Economic Life

By J.J. Van Duijn

Routledge – 2005 – 256 pages

Series: Economic History

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Description

Of all fluctuations in economic activity, the long wave or Kondratieff cycle is easily the most puzzling and least understood one. Does it really exist, and if so, is it only a cycle in prices or a cycle in economic activity at large? What causes it, and has it been confined to Europe or does it affect the world economy as a whole?

These questions, which seemed of little relevance in the prosperous years of the postwar growth era, have gained new importance since 1973. With the downturn of the long wave, interest in it has enjoyed a revival, as it did in the 1930s. A great number of publications on the long wave have appeared since 1973, many of which have added to our insight of what causes the recurrent alternations of growth acceleration and retardation. This book is the first in the English language in which all important long wave theories, old as well as recent, are brought together. It focuses on the long wave as an international phenomenon, affecting all industrialised countries. It contains new theory as well as empirical evidence and in the final section suggests a number of policy recommendations to generate innovation.

This book offers an interpretation of long-term economic development different from those commonly found in the literature. It will be of interest to students and scholars of the economics of growth and change, as well as to economic historians and policy-makers. This book was first published in 1983.

Contents

Preface ix

PART I.{emsp}CYCLES AND TRENDS

I. Cyclical Fluctuations 3

Four Cycles 3

The Inventory Cycle 8

The Fixed Investment Cycle 11

The Kuznets Cycle 15

The Kondratieff Cycle 18

II. Growth as an S-Shaped Phenomenon 20

Representations of Growth 20

Growth as an S-Shaped Curve 21

Industry Growth Patterns 26

Asymptotic Growth Curves 32

Appendix A: Measuring the Rate of Economic Growth 37

Appendix B: Estimating the Parameters of Asymptotic Growth Curves 42

III. Secular Trends 45

Rostow’s Stages of Economic Growth 45

Economic Growth in the Very Long Run 54

PART II.{emsp}LONG WAVE THEORIES

IV. The Discovery of the Long Wave 59

First Sketches of a Long Wave 59

Two Dutchmen 61

Kondratieff 63

A Brief Survey of Pre-war Literature 68

Appendix C: Kondratieff’s Writings 71

V. The Kondratieff as a Price Cycle 73

Fluctuations in Prices 73

Rostow’s Model of the Kondratieff Cycle 83

VI. Innovation Theories 93

Innovation 93

Schumpter’s Theory of Economic Development 97

Mensch’s Theory 10

VII. Fluctuations in Infrastructural Investment 112

Infrastructural Investment as a Cause of Long Waves 112

A Simple Long Wave Model 125

VIII. Innovation, Innovation Life Cycles, and Infrastructural Investment 129

PART III.{emsp}EMPIRICAL EVIDENCE

IX. Long Waves in Production 147

Fluctuations in Industrial Production 147

Fluctuations in Capital Formation 158

A Long Wave Chronology 162

Appendix D: Testing the Long wave Hypothesis after Trend Elimination with a Log-Linear Trend 165

Appendix E: Testing the Long Wave Hypothesis by Means of Spectral Analysis 169

X. Fluctuations in Innovations 173

A Survey of Basic Innovations 173

Fluctuations in Innovations Over Time 180

Innovations by Sector 185

PART IV.{emsp}THE FOURTH KONDRATIEFF DOWNSWING

XI. The Stagnation of the 1970s 195

What Caused the 1973-Downturn? 195

The Current Depression and the Previous One 203

The Slow Response of Some Economic Agents to Stagnation 205

Appendix F: The Current and the Previous Depression: A Comparison of the United States and the United Kingdom 209

XII. Economic Policy During a Depression 211

What Will Happen During a Depression Phase 211

The Extra Complication: Rigidity 214

The Need to Offer a ‘New Deal’ 218

Bibliography 227

Index 235

Related Subjects

  1. Economic History

Name: The Long Wave in Economic Life (eBook)Routledge 
Description: By J.J. Van Duijn. Of all fluctuations in economic activity, the long wave or Kondratieff cycle is easily the most puzzling and least understood one. Does it really exist, and if so, is it only a cycle in prices or a cycle in economic activity at large? What causes it, and...
Categories: Economic History