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Economic Waves series

(see Business cycles)

Cycle/Wave Name Years
Kitchin inventory 3–5
Juglar fixed investment 7–11
Kuznets infrastructural investment 15–25
Kondratiev wave 45–60

Kondratiev waves—also called Supercycles, surges, long waves or K-waves—are described as regular, sinusoidal-like cycles in the modern (capitalist) world economy. Averaging fifty and ranging from approximately forty to sixty years in length, the cycles consist of alternating periods between high sectoral growth and periods of relatively slow growth. Unlike the short-term business cycle which in various forms has been familiar since the nineteenth century, the long wave of this theory does not belong within current orthodox economics and is sometimes categorized as part of heterodox economics (a catch-all term for alternative ideas).

The Russian economist Nikolai Kondratiev (also written Kondratieff) was the first to bring these observations to international attention in his book The Major Economic Cycles (1925) alongside other works written in the same decade. Two Dutch economists, Jacob van Gelderen and Samuel de Wolff, had previously argued for the existence of 50 to 60 year cycles in 1913. However, the work of de Wolff and van Gelderen has only recently been translated from Dutch to reach a wider audience.

Kondratiev was a Soviet economist, but his economic conclusions were disliked by the Soviet leadership and upon their release he was quickly dismissed from his post as director of the Institute for the Study of Business Activity in the Soviet Union in 1928. His conclusions were seen as a criticism of Stalin’s intentions for the Soviet economy: as a result he was sentenced to the Russian Gulag and later received the death penalty in 1938.

Later, in Business Cycles (1939), Joseph Schumpeter suggested naming the cycles, "Kondratieff waves", in honor of the economist who first noticed them. In the 1950s, French economist François Simiand proposed naming the ascendant period of the cycle "Phase A" and the downward period "Phase B". Some market commentators divide the Kondratiev wave into four 'seasons', namely, the Kondratiev Spring (improvement or plateau) and Summer (acceleration or prosperity) of the ascendant period and the Kondratiev Fall (recession or plateau) and Winter (acceleration or depression) of the downward period.


Characteristics of the cycle

The cycle is supposedly more visible in international production data than in individual national economies [1]. It affects all the sectors of an economy, and concerns mainly output rather than prices (although Kondratieff had made observations focusing more on prices, inflation and interest rates). According to Kondratieff, the ascendant phase is characterized by an increase in prices and low interest rates, while the other phase consists of a decrease in prices and high interest rates.

Kondratieff identified three phases in the cycle: expansion, stagnation, recession. More common today is the division into four periods with a turning point (collapse) between the first and second phases. Writing in the 1920s, Kondratieff proposed to apply the theory to the 19th century:

  • 1790 – 1849 with a turning point in 1815.
  • 1850 – 1896 with a turning point in 1873.
  • Kondratieff supposed that in 1896, a new cycle had started.

The phases of Kondratieff's waves also carry with them social shifts and changes in the public mood. The first stage of expansion and growth, the "Spring" stage, encompasses a social shift in which the wealth, accumulation, and innovation that are present in this first period of the cycle create upheavals and displacements in society. The economic changes result in redefining work and the role of participants in society. In the next phase, the "Summer" stagflation, there is a mood of affluence from the previous growth stage that change the attitude towards work in society, creating inefficiencies. After this stage comes the season of deflationary growth, or the plateau period. The popular mood changes during this period as well. It shifts toward stability, normalcy, and isolationism after the policies and economics during unpopular excesses of war. Finally, the "Winter" stage, that of severe depression, includes the integration of previous social shifts and changes into the social fabric of society, supported by the shifts in innovation and technology.

A fourth cycle may have roughly coincided with the Cold War: beginning in 1949, turning with the economic peak of the mid-1960s and the Vietnam War escalation, hitting a trough in 1982 amidst growing predictions in the United States of worldwide Soviet domination and ending with the fall of the Berlin Wall in 1989. The current cycle most likely peaked in 1999 with a possible winter phase beginning in late 2008. The Austrian-school economists point out that extreme price inflation in the absence of economic growth is a form of capital destruction, allowing either stagflation (as in the 1970s and much of the 2000s during the gold and oil price run-ups) or deflation (as in the 1930s and possibly following the crash in commodity prices beginning in 2008) to represent a recession or depression phase of the Kondratieff theory.

Tentative explanations of the cycle

Early on, four schools of thought emerged as to why capitalist economies have these long waves. These schools of thought centered on innovations, capital investment, war and capitalist crisis. According to the innovation theory, these waves arise from the bunching of basic innovations that launch technological revolutions that in turn create leading industrial or commercial sectors. Kondratiev's ideas were taken up by Joseph Schumpeter in the 1930s. The theory hypothesized the existence of very long-run macroeconomic and price cycles, originally estimated to last 50–54 years.

A rough schematic drawing showing the "World Economy" over time according to the Kondratiev theory

Since the inception of the theories, various studies have expanded the range of possible cycles, finding longer or shorter cycles in the data. The Marxist scholar Ernest Mandel revived interest in long wave theory with his 1964 essay predicting the end of the long boom after five years and in his Alfred Marshall lectures in 1979. However, in Mandel's theory, there are no long "cycles", only distinct epochs of faster and slower growth spanning 20–25 years. More recently, investment theorist Ian Gordon has advocated a 4 season Kondratiev model in which spring is moderate growth from a stock market and inflationary bottom, summer is characterized by accelerating growth and high inflation, autumn is characterized by declining inflation and asset bubbles, and winter involves the collapse of the asset bubbles.[2]

Long wave theory is not accepted by most academic economists, but it is one of the bases of innovation-based, development, and evolutionary economics, i.e. the main heterodox stream in economics. Among economists who accept it, there has been no universal agreement about the start and the end years of particular waves. This points to another criticism of the theory: that it amounts to seeing patterns in a mass of statistics that aren't really there.

Moreover, there is a lack of agreement over the cause of this phenomenon. How much this matters is disputed: some scientific patterns have in the past been identified before an explanation could be advanced. (The best known example is that of the precursors to the periodic table, which were in fact rejected by many scientists precisely on the grounds of lack of explanation.)

There is controversy over the validity of Kondratiev's theory among many scholars. Some believe that not enough is attributed to actual human errors that have created some of the economic situations of history, and too much to the inevitability of the characteristics of the phases of the waves. They claim that many of the situations were entirely avoidable, not the consequences of an unstoppable wave pattern. Others doubt the legitimacy of Kondratiev's waves because they believe that every wave is a structural cycle that has unique characteristics and cannot be repeated. There is also controversy over Kondratiev's research—many believe that the conclusions and results of his research are biased because he highlighted and used only certain events to reach his conclusions and left out other important data and events that could have affected his outcomes.

Most cycle theorists agree, however, with the "Schumpeter-Freeman-Perez" paradigm of five waves so far since the industrial revolution, and the sixth one to come. These five cycles are

  • The Industrial Revolution—1771
  • The Age of Steam and Railways—1829
  • The Age of Steel, Electricity and Heavy Engineering—1875
  • The Age of Oil, the Automobile and Mass Production—1908
  • The Age of Information and Telecommunications—1971

According to this theory, we are currently at the turning-point of the 5th Kondratiev. Some scholars, particularly Immanuel Wallerstein, argue that cycles of global war are tied to Capitalist Long Waves. Major, highly-destructive wars tend to begin just prior to an output upswing.

A simplified and somewhat updated sequence of Kondrtiev Waves can be seen as follows;

Period Date Innovation Saturation point
First Industrial Revolution Circa 1800 – 1850 Cotton based technology; spinning weaving, etc. 1810 –end of Napoleonic Wars
Second Industrial Revolution Circa 1850 – 1900 Age of steam; railways, shipping, heavy industry, iron and steel, etc. 1870s
Third Industrial revolution 1908 – 1947 Petrochemicals, internal combustion engine, electrification. Inter-war slump 1920s and 30s
Post-war Boom 1947 – 1991 Consumer goods, electronics, etc. 1973
Contemporary Era 1991 – present Internet, wireless technology, biotechnology, etc. 2010s

Independently, the economists/physicists Cesare Marchetti and Theodore Modis have evidenced the cyclical Kondratiev pattern from physical variables such as energy consumption, the use of horsepower, the appearance of basic innovations, the discovery of stable elements, bank failures, homicides, and one-mile-run records. [3]

The historian Eric Hobsbawm wrote of the theory: "That good predictions have proved possible on the basis of Kondratiev Long Waves—this is not very common in economics—has convinced many historians and even some economists that there is something in them, even if we don't know what." [4]

More recently the physicist and systems scientist Tessaleno Devezas advanced a causal model for the long wave phenomenon based on a generation-learning model[5] and a nonlinear dynamic behaviour of information systems[6]. In both works a complete theory is presented containing not only the explanation for the existence of K-Waves, but also and for the first time an explanation for the timing of a K-Wave (~60 years = 2 generations).

See also


  1. ^ See, e.g. Korotayev, Andrey V., & Tsirel, Sergey V.(2010). A Spectral Analysis of World GDP Dynamics: Kondratieff Waves, Kuznets Swings, Juglar and Kitchin Cycles in Global Economic Development, and the 2008–2009 Economic Crisis. Structure and Dynamics. Vol.4. #1. P.3-57.
  2. ^ See materials at
  3. ^ Marchetti, Cesare (1987), Society as a Learning System: Discovery, Invention, and Innovation Cycles Revisited,  
  4. ^ Hobsbawm (1999), pp. 87f.
  5. ^ Devezas, Tessaleno (2001), The Biological Determinants of long-wave behaviour in socioeconomic growth and development, Technological Forecasting & Social Change 68, pp. 1-57  
  6. ^ Devezas, Tessaleno; Corredine, James (2002), The nonlinear dynamics of technoeconomic systems - An informational interpretation, Technological Forecasting and Social Change, 69, pp. 317-357  

Additional References

  • Barnett, Vincent (1998). Kondratiev and the Dynamics of Economic Development. London: Macmillan. ISBN 0312210485.  
  • Cheung, Edward (1995, 2007). Baby Boomers, Generation X and Social Cycles, Volume 1: North American Long-waves. Toronto: Longwave Press. ISBN 978-1896330006.  
  • Devezas, Tessaleno (2006). Kondratieff Waves, Warfare and World Security. Amsterdam: IOS Press. ISBN 1-58603-588-6.  
  • Freeman, Chris; Louçã, Francisco (2001). As Time Goes By. From the Industrial Revolutions to the Information Revolution. Oxford: Oxford University Press. ISBN 0199241074.  
  • Goldstein, Joshua (1988). Long Cycles: Prosperity and War in the Modern Age. New Haven: Yale University Press. ISBN 0300039948.  
  • Grinin, L.; Munck, V. C. de; Korotayev, A. (2006). History and mathematics: Analyzing and Modeling Global Development. Moscow: URSS. ISBN 5484010012.  
  • Hobsbawm, Eric (1999). Age of Extremes: The Short Twentieth Century 1914 - 1991. London: Abacus. ISBN 0349106711.  
  • Kohler, Gernot; Chaves, Emilio José (2003). Globalization: Critical Perspectives. Haupauge, New York: Nova Science Publishers. ISBN 1590333462.   With contributions by Samir Amin, Christopher Chase Dunn, Andre Gunder Frank, Immanuel Wallerstein.
  • Mandel, Ernest (1964). "The Economics of Neocapitalism". The Socialist Register.  
  • Mandel, Ernest (1980). Long waves of capitalist development: the Marxist interpretation. New York: Cambridge University Press. ISBN 0521230004.  
  • Rothbard, Murray (1984). The Kondratieff Cycle: Real or Fabricated?. Ludwig von Mises Institute.  
  • Marchetti, Cesare (1986). "Fifty-Year Pulsation in Human Affairs, Analysis of Some Physical Indicators". Futures 17 (3): 376–388.  
  • Modis, Theodore (1992). Predictions: Society's Telltale Signature Reveals the Past and Forecasts the Future. New York: Simon & Schuster. ISBN 0671759175.  
  • Solomou, Solomos (1989). Phases of Economic Growth, 1850–1973: Kondratieff Waves and Kuznets Swings. Cambridge: Cambridge University Press. ISBN 0521334578.  
  • Tausch, Arno; Ghymers, Christian (2007). From the 'Washington' Towards a 'Vienna Consensus'? A Quantitative Analysis on Globalization, Development and Global Governance. Haupauge, New York: Nova Science Publishers. ISBN 1600214223.  
  • Turchin, Peter; et al. (2006). History & Mathematics: Historical Dynamics and Development of Complex Societies. Moscow: KomKniga. ISBN 5484010020.  
  • The Kondratieff Wave. Dell Publishing Co. Inc. New York, N.Y., USA. 1972. pp. 198.  

Further reading

External links



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