K wave - the super economic cycles

2023

收藏 2015-01-30

check this chart below,

[img]https://ci6.googleusercontent.com/proxy/jW5q_ZKrPdsM2NutHje74ZLON6R6dYY5PN4JgS0wPejpx0sj_DQmYagawm62uyO4xKPNezIBIYagCS5qR6zlt6DMVPlEB3VVd7Pn1qgdKxnij8J604D2Z5NSMkWIoa8qMFE19BHcwFNVs8cApajQC1ZRg-4hTt2JBlw7DbhBAI_n0A=s0-d-e1-ft#

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Based on historical data, there are these super cycles in the world economic cycles since industrial revolution, and there are some major reasons that have been used to explain the causes as below.

In my opinion, the third reason is derived from the above two, and closely related to the technology and demographic booms, and the main reasons are the first two that are presented in the article.

Although I haven't done any research on the relationships and the co-incidence between the two, the two factors may have correlated closely as I assume, which may be the reason that cause this huge swing in the economic cycles in history.

And therefore, the opinion that I held is this, we may create this time difference of the two sub-cycles by promoting babe birth while the economies start to turn backwards and the babe boom will come naturally when the Tech wave withdraws. With that cycle under control, the effects of the two cycles (the tech cycle and demographic cycle) will somehow offset each other, and the world economy may have a smooth moving patten. Though all of these is just like a pattern design, maybe there are lots of factors to be taken into account, I would assume that it at least partly explained the swing/cycles, which has been such a disaster in the modern history which rather presents a bizarre phenomenon that the higher the technology level we have achieved, the more destructive the negative impacts will hit our system.

Hope it makes some sense to you, and there are always way more things for us to learn from the history, I guess......

p.s. Technological innovation theory[edit]

According to the innovation theory, these waves arise from the bunching of basic innovations that launch technological revolutions that in turn create leading industrial orcommercial 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.

In recent decades there has been considerable progress in historical economics and the history of technology, and numerous investigations of the relationship between technological innovation and economic cycles. Some of the works involving long cycle research and technology include Mensch (1979), Tylecote (1991), The International Institute for Applied Systems Analysis (IIASA) (Marchetti, Ayres), Freeman and Louçã (2001) and Carlota Perez.

Perez (2002) places the phases on a logistic or S curve, with the following labels: beginning of a technological era as irruption, the ascent as frenzy, the rapid build out assynergy and the completion as maturity.[7]

Demographic theory[edit]

Because people have fairly typical spending patterns through their life cycle, such as schooling, marriage, first car purchase, first home purchase, upgrade home purchase, maximum earnings period, maximum retirement savings and retirement, demographic anomalies such as baby booms and busts exert a rather predictable influence on the economy over a long time period. Harry Dent has written extensively on demographics and economic cycles. Tylecote (1991) devoted a chapter to demographics and the long cycle. [8]

Debt deflation[edit]Main article: Debt deflation

Debt deflation is a theory of economic cycles, which holds that recessions and depressions are due to the overall level of debt shrinking (deflating): the credit cycle is the cause of the economic cycle.

The theory was developed by Irving Fisher following the Wall Street Crash of 1929 and the ensuing Great Depression. Debt deflation was largely ignored in favor of the ideas ofJohn Maynard Keynes in Keynesian economics, but has enjoyed a resurgence of interest since the 1980s, both in mainstream economics and in the heterodox school of Post-Keynesian economics, and has subsequently been developed by such Post-Keynesian economists as Hyman Minsky[9] and Steve Keen.[10]