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100-412: It is stated that the period of a wave ranges from forty to sixty years, the cycles consist of alternating intervals of high sectoral growth and intervals of relatively slow growth. Long wave theory is not accepted by most academic economists. Among economists who accept it, there is a lack of agreement about both the cause of the waves and the start and end years of particular waves . Among critics of

200-410: A Juglar cycle has four stages: Schumpeter's Juglar model associates recovery and prosperity with increases in productivity, consumer confidence , aggregate demand , and prices. In the 20th century, Schumpeter and others proposed a typology of business cycles according to their periodicity, so that a number of particular cycles were named after their discoverers or proposers: Some say interest in

300-664: A communist revolution . Though only passing references in Das Kapital (1867) refer to crises, they were extensively discussed in Marx's posthumously published books, particularly in Theories of Surplus Value . In Progress and Poverty (1879), Henry George focused on land 's role in crises – particularly land speculation – and proposed a single tax on land as a solution. Statistical or econometric modelling and theory of business cycle movements can also be used. In this case

400-411: A Bayesian framework – see e.g. [Harvey, Trimbur, and van Dijk, 2007, Journal of Econometrics ] – can incorporate such a range explicitly by setting up priors that concentrate around say 6 to 12 years, such flexible knowledge about the frequency of business cycles can actually be included in their mathematical study, using a Bayesian statistical paradigm. Later , economist Joseph Schumpeter argued that

500-595: A business cycle. The simplest defines recessions as two consecutive quarters of negative GDP growth. More satisfactory classifications are provided by, first including more economic indicators and second by looking for more data patterns than the two quarter definition. In the United States , the National Bureau of Economic Research oversees a Business Cycle Dating Committee that defines a recession as "a significant decline in economic activity spread across

600-470: A century to complete. Grübler devotes a chapter to the long economic wave. In 1996, Giancarlo Pallavicini published the ratio between the long Kondratiev wave and information technology and communication. Korotayev et al. recently employed spectral analysis and claimed that it confirmed the presence of Kondratiev waves in the world GDP dynamics at an acceptable level of statistical significance. Korotayev et al. also detected shorter business cycles, dating

700-561: A civil Body Politick, for our better Ordering and Preservation, and Furtherance of the Ends aforesaid: And by Virtue hereof do enact, constitute, and frame, such just and equal Laws, Ordinances, Acts, Constitutions, and Offices, from time to time, as shall be thought most meet and convenient for the general Good of the Colony; unto which we promise all due Submission and Obedience. IN WITNESS whereof we have hereunto subscribed our names at Cape-Cod

800-462: A company stock's current earnings. Intellectual capital contributes to a stock's return growth. Unlike long-term trends, medium-term data fluctuations are connected to the monetary policy transmission mechanism and its role in regulating inflation during an economic cycle. At the same time, the presence of nominal restrictions in price setting behavior might impact the short-term course of inflation. In recent years economic theory has moved towards

900-404: A cycle that needed to be explained and instead viewing their apparently cyclical nature as a methodological artefact. This means that what appear to be cyclical phenomena can actually be explained as just random events that are fed into a simple linear model. Thus business cycles are essentially random shocks that average out over time. Mainstream economists have built models of business cycles based

1000-488: A form of fluctuation. In economic activities, a cycle of expansions happening, followed by recessions, contractions, and revivals. All of which combine to form the next cycle's expansion phase; this sequence of change is repeated but not periodic. The explanation of fluctuations in aggregate economic activity is one of the primary concerns of macroeconomics and a variety of theories have been proposed to explain them. Within economics, it has been debated as to whether or not

1100-470: A network of free enterprises searching for profit. The problem of how business cycles come about is therefore inseparable from the problem of how a capitalist economy functions. In the United States, it is generally accepted that the National Bureau of Economic Research (NBER) is the final arbiter of the dates of the peaks and troughs of the business cycle. An expansion is the period from a trough to

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1200-423: A peak and a recession as the period from a peak to a trough. The NBER identifies a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production". There is often a close timing relationship between the upper turning points of the business cycle, commodity prices, and freight rates, which

1300-407: A rather predictable influence on the economy over a long time period. The Easterlin hypothesis deals with the post-war baby-boom. Harry Dent has written extensively on demographics and economic cycles. Tylecote (1991) devoted a chapter to demographics and the long cycle. Georgists such as Mason Gaffney , Fred Foldvary and Fred Harrison argue that land speculation is the driving force behind

1400-418: A recession or depression. This debate has important policy consequences: proponents of exogenous causes of crises such as neoclassicals largely argue for minimal government policy or regulation ( laissez faire ), as absent these external shocks, the market functions, while proponents of endogenous causes of crises such as Keynesians largely argue for larger government policy and regulation, as absent regulation,

1500-399: A series of innovations becomes available, it becomes more efficient to invest in its adoption, extension and use than in creating new innovations. Each wave of technological innovations can be characterized by the area in which the most revolutionary changes took place ("leading sectors"). Every wave of innovations lasts approximately until the profits from the new innovation or sector fall to

1600-402: A single page in two different ways, producing two different orders in unnumbered lists of signers. The second (1721) and third (1772) editions changed the order of the first edition by combining the first and fourth columns into the first long column, and similarly for the other columns. The fifth (1826) and sixth (1855) editions returned the names to their original first edition order by combining

1700-407: A solid alternative even for rather complex economic theory. In 1860 French economist Clément Juglar first identified economic cycles 7 to 11 years long, although he cautiously did not claim any rigid regularity. This interval of periodicity is also commonplace, as an empirical finding, in time series models for stochastic cycles in economic data. Furthermore, methods like statistical modelling in

1800-476: A time series analysis is used to capture the regularities and the stochastic signals and noise in economic time series such as Real GDP or Investment. [Harvey and Trimbur, 2003, Review of Economics and Statistics ] developed models for describing stochastic or pseudo- cycles, of which business cycles represent a leading case. As well-formed and compact – and easy to implement – statistical methods may outperform macroeconomic approaches in numerous cases, they provide

1900-708: A turning point ( collapse ) between expansion and stagnation. Writing in the 1920s, Kondratiev proposed to apply the theory to the 19th century: The long cycle supposedly affects all sectors of an economy. Kondratiev focused on prices and interest rates , seeing the ascendant phase as characterized by an increase in prices and low interest rates while the other phase consists of a decrease in prices and high interest rates. Subsequent analysis concentrated on output. Kondratiev waves present both causes and effects of common events that have recurred in capitalistic economies throughout history. Although Kondratiev himself made little differentiation between cause and effect, understanding

2000-697: A type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion phase of the next cycle; in duration, business cycles vary from more than one year to ten or twelve years; they are not divisible into shorter cycles of similar characteristics with amplitudes approximating their own. According to A. F. Burns: Business cycles are not merely fluctuations in aggregate economic activity. The critical feature that distinguishes them from

2100-649: A war was the Panic of 1825 . Business cycles in OECD countries after World War II were generally more restrained than the earlier business cycles. This was particularly true during the Golden Age of Capitalism (1945/50–1970s), and the period 1945–2008 did not experience a global downturn until the Late-2000s recession . Economic stabilization policy using fiscal policy and monetary policy appeared to have dampened

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2200-419: Is a phase shift and overlap of the so-called Kondratiev cycles of IT and health (shown in the figure). He argued that historical growth phases in combination with key technologies do not necessarily imply the existence of regular cycles in general. Goldschmidt is of the opinion that different fundamental innovations and their economic stimuli do not exclude each other as they mostly vary in length and their benefit

2300-467: Is a result of the coming end of the "wave of the Information and telecommunications technological revolution". Some authors have started to predict what the sixth wave might be, such as James Bradfield Moody and Bianca Nogrady who forecast that it will be driven by resource efficiency and clean technology . On the other hand, Šmihula himself considers the waves of technological innovations during

2400-458: Is important for innovation-based, development and evolutionary economics . Yet, among economists who accept it, there has been no formal universal agreement about the standards that should be used universally to place the start and end years for each wave. Agreement of start and end years can be +1 to 3 years for each 40- to 65-year cycle. Health economist and biostatistician Andreas J. W. Goldschmidt searched for patterns and proposed that there

2500-597: Is low and opportunity is easily available, peaceful, moral decisions are preferred and Aristotle's "Good Life" is possible (Americans call the good life "the American Dream "). Opportunity created the simple inspiration and genius of the Mayflower Compact , for example. Post-World War II and the post-California gold rush 1850s exemplify times of great opportunity and low inequity, and both resulted in unprecedented technological and industrial advances. On

2600-417: Is not applicable to all participants in a market. Economic cycle Heterodox Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, government institutions, and private sector firms. There are many definitions of

2700-409: Is not stable over different time periods because of economic shocks , random fluctuations and development in financial systems . Ludvigson believes consumer confidence index is a coincident indicator as it relates to consumer's current situations. Winton & Ralph state that retail trade index is a benchmark for the current economic level because its aggregate value counts up for two-thirds of

2800-458: Is often relegated to “noise”; an example is a worker strike or an isolated period of severe weather. The individual episodes of expansion/recession occur with changing duration and intensity over time. Typically their periodicity has a wide range from around 2 to 10 years. There are many sources of business cycle movements such as rapid and significant changes in the price of oil or variation in consumer sentiment that affects overall spending in

2900-435: Is shorter than its predecessor. His main stress is put on technological progress and new technologies as decisive factors of any long-time economic development. Each of these waves has its innovation phase which is described as a technological revolution and an application phase in which the number of revolutionary innovations falls and attention focuses on exploiting and extending existing innovations. As soon as an innovation or

3000-472: Is shown to be particularly tight in the grand peak years of 1873, 1889, 1900 and 1912. Hamilton expressed that in the post war era, a majority of recessions are connected to an increase in oil price. Commodity price shocks are considered to be a significant driving force of the US business cycle. Along these lines, the research in [Trimbur, 2010, International Journal of Forecasting ] shows empirical results for

3100-483: Is supposed to account for business cycles thanks to the multiplier and the accelerator. The amplitude of the variations in economic output depends on the level of the investment, for investment determines the level of aggregate output (multiplier), and is determined by aggregate demand (accelerator). Mayflower Compact The Mayflower Compact , originally titled Agreement Between the Settlers of New Plymouth ,

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3200-691: The Colony of Virginia , with the journey financed by the Company of Merchant Adventurers of London . Storms forced them to anchor at the hook of Cape Cod in Massachusetts , however, as it was unwise to continue with provisions running short. This inspired some of the non-Puritan passengers (whom the Puritans referred to as "Strangers") to proclaim that they "would use their own liberty; for none had power to command them" since they would not be settling in

3300-576: The Great Depression . 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. In recent decades there has been considerable progress in historical economics and

3400-567: The Stone Age . Including those, authors distinguish three different long-term meta paradigms , each with different long waves. The first focused on the transformation of material, including stone , bronze , and iron . The second, often referred to as the Industrial Revolution and Second Industrial Revolution , was dedicated to the transformation of energy, including water , steam , electric , and combustion power . Finally,

3500-449: The heterodox school of post-Keynesian economics and has subsequently been developed by such post-Keynesian economists as Hyman Minsky and Steve Keen . Inequity appears to be the most obvious driver of Kondratiev waves, and yet some researchers have presented a technological and credit cycle explanation as well. There are several modern timing versions of the cycle although most are based on either of two causes: one on technology and

3600-413: The 1930s. Sismondi's theory of periodic crises was developed into a theory of alternating cycles by Charles Dunoyer , and similar theories, showing signs of influence by Sismondi, were developed by Johann Karl Rodbertus . Periodic crises in capitalism formed the basis of the theory of Karl Marx , who further claimed that these crises were increasing in severity and, on the basis of which, he predicted

3700-629: The 19th and first half of the 20th century, specifically the period 1815–1939. This period started from the end of the Napoleonic wars in 1815, which was immediately followed by the Post-Napoleonic depression in the United Kingdom (1815–1830), and culminated in the Great Depression of 1929–1939, which led into World War II . See Financial crisis: 19th century for listing and details. The first of these crises not associated with

3800-545: The 19th century. ( See: Productivity improving technologies (historical) .) A table of innovations and long cycles can be seen at: Kondratiev wave § Modern modifications of Kondratiev theory . Since surprising news in the economy, which has a random aspect, impact the state of the business cycle, any corresponding descriptions must have a random part at its root that motivates the use of statistical frameworks in this area. There were frequent crises in Europe and America in

3900-627: The 300th anniversary of the Mayflower landing, then Massachusetts governor Calvin Coolidge , who became the 30th U.S. President a few years later, said the following about the Mayflower Compact: The compact which they signed was an event of the greatest importance. It was the foundation of liberty based on law and order, and that tradition has been steadily upheld. They drew up a form of government which has been designated as

4000-781: The Compact signatories. The Pilgrims had lived for some years in Leiden , a city in the Dutch Republic . Historian Nathaniel Philbrick states, "Just as a spiritual covenant had marked the beginning of their congregation in Leiden, a civil covenant would provide the basis for a secular government in America." The original document has been lost, but three versions exist from the 17th century: printed in Mourt's Relation (1622), which

4100-753: The Grace of God, of Great Britain , France , and Ireland , King, Defender of the Faith , &c. Having undertaken for the Glory of God, and Advancement of the Christian Faith, and the Honour of our King and Country, a Voyage to plant the first Colony in the northern Parts of Virginia ; Do by these Presents, solemnly and mutually, in the Presence of God and one another, covenant and combine ourselves together into

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4200-604: The Kuznets to about 17 years and calling it the third harmonic of the Kondratiev, meaning that there are three Kuznets cycles per Kondratiev. Leo A. Nefiodow shows that the fifth Kondratieff ended with the global economic crisis of 2000–2003 while the new, sixth Kondratieff started simultaneously. According to Leo A. Nefiodow, the carrier of this new long cycle will be health in a holistic sense—including its physical, psychological, mental, social, ecological and spiritual aspects;

4300-632: The Relief of the Manufacturing Poor, both identified the cause of economic cycles as overproduction and underconsumption , caused in particular by wealth inequality . They advocated government intervention and socialism , respectively, as the solution. This work did not generate interest among classical economists, though underconsumption theory developed as a heterodox branch in economics until being systematized in Keynesian economics in

4400-550: The age of steel. Measured by value added, the leading industry in the U.S. from 1880 to 1920 was machinery, followed by iron and steel. Any influence of technology during the cycle that began in the Industrial Revolution pertains mainly to England. The U.S. was a commodity producer and was more influenced by agricultural commodity prices. There was a commodity price cycle based on increasing consumption causing tight supplies and rising prices. That allowed new land to

4500-595: The agreed-upon Virginia territory. To prevent this, the Pilgrims determined to establish their own government, while still affirming their allegiance to the Crown of England. Thus, the Mayflower Compact was based simultaneously upon a majoritarian model and the settlers' allegiance to the king. It was in essence a social contract in which the settlers consented to follow the community's rules and regulations for

4600-400: The basic innovations of the sixth Kondratieff are "psychosocial health" and "biotechnology". More recently, the physicist and systems scientist Tessaleno Devezas advanced a causal model for the long wave phenomenon based on a generation-learning model and a nonlinear dynamic behaviour of information systems. In both works, a complete theory is presented containing not only the explanation for

4700-451: The boom and bust cycle. Land is a finite resource which is necessary for all production and they claim that because exclusive usage rights are traded around, this creates speculative bubbles which can be exacerbated by overzealous borrowing and lending. As early as 1997, a number of Georgists predicted that the next crash would come in 2008. Debt deflation is a theory of economic cycles which holds that recessions and depressions are due to

4800-707: The business cycle, notably the paradox of thrift , and today this previously heterodox school has entered the mainstream in the form of Keynesian economics via the Keynesian revolution. Mainstream economics views business cycles as essentially "the random summation of random causes". In 1927, Eugen Slutzky observed that summing random numbers, such as the last digits of the Russian state lottery, could generate patterns akin to that we see in business cycles, an observation that has since been repeated many times. This caused economists to move away from viewing business cycles as

4900-484: The business cycle. For almost 30 years, these economic data series are considered as "the leading index" or "the leading indicators"-were compiled and published by the U.S. Department of Commerce . A prominent coincident, or real-time, business cycle indicator is the Aruoba-Diebold-Scotti Index . Recent research employing spectral analysis has confirmed the presence of Kondratiev waves in

5000-581: The cause and effect of Kondratiev waves is a useful discussion and academic tool. The causes documented by Kondratiev waves primarily include inequity, opportunity and social freedoms. Often, much more discussion is made of the notable effects of these causes as well. Effects are both good and bad and include, to name just a few, technological advance, birthrates, populism and revolution—and revolution's contributing causes which can include racism, religious and political intolerance, failed freedoms and opportunity, incarceration rates, terrorism, etc. When inequity

5100-430: The commercial convulsions of earlier centuries or from the seasonal and other short term variations of our own age is that the fluctuations are widely diffused over the economy – its industry, its commercial dealings, and its tangles of finance. The economy of the western world is a system of closely interrelated parts. He who would understand business cycles must master the workings of an economic system organized largely in

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5200-531: The compact, so he wrote two of the three versions. The wording of those two versions is quite similar, unlike that of Morton. Bradford's handwritten manuscript is kept in a vault at the State Library of Massachusetts. The text as presented in modern sources is as follows: IN THE NAME OF GOD, AMEN . We, whose names are underwritten, the Loyal Subjects of our dread Sovereign Lord King James , by

5300-418: The cycles "Kondratieff waves" in his honor. The underlying idea is closely linked to organic composition of capital . Two Dutch economists, Jacob van Gelderen and Salomon de Wolff , had previously argued for the existence of 50- to 60-year cycles in 1913 and 1924, respectively. Since the inception of the theory, various studies have expanded the range of possible cycles, finding longer or shorter cycles in

5400-659: The cycling of monetary systems. Since 1960, World GDP has increased by fifty-nine times, and these multiples have not even kept up with annual inflation over the same period. Social Contract (freedoms and absence of social problems) collapses may be observed in nations where incomes are not kept in balance with cost-of-living over the timeline of the monetary system cycle. The Bible (760 BCE) and Hammurabi 's Code (1763 BCE) both explain economic remediations for cyclic sixty-year recurring great depressions, via fiftieth-year Jubilee (biblical) debt and wealth resets . Thirty major debt forgiveness events are recorded in history including

5500-663: 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 long waves are the result of the normal business cycle and noneconomic factors, such as wars. In 1996, George Modelski and William R. Thompson published a book documenting K-Waves dating back to 930 AD in China. Separately, Michael Snyder wrote: "economic cycle theories have enabled some analysts to correctly predict

5600-665: The debt forgiveness given to most European nations in the 1930s to 1954. There were great increases in productivity , industrial production and real per capita product throughout the period from 1870 to 1890 that included the Long Depression and two other recessions. There were also significant increases in productivity in the years leading up to the Great Depression. Both the Long and Great Depressions were characterized by overcapacity and market saturation. Over

5700-453: The different typologies of cycles has waned since the development of modern macroeconomics , which gives little support to the idea of regular periodic cycles. Further econometric studies such as the two works in 2003 and 2007 cited above demonstrate a clear tendency for cyclical components in macroeconomic times to behave in a stochastic rather than deterministic way. Others, such as Dmitry Orlov , argue that simple compound interest mandates

5800-478: The economic crisis in former Eastern Bloc countries following the end of the Soviet Union in 1991. For several of these countries the period 1989–2010 has been an ongoing depression, with real income still lower than in 1989. In 1946, economists Arthur F. Burns and Wesley C. Mitchell provided the now standard definition of business cycles in their book Measuring Business Cycles : Business cycles are

5900-435: The economic cycle is framed in terms of refuting or supporting Say's law; this is also referred to as the " general glut " (supply in relation to demand) debate. Until the Keynesian revolution in mainstream economics in the wake of the Great Depression , classical and neoclassical explanations (exogenous causes) were the mainstream explanation of economic cycles; following the Keynesian revolution, neoclassical macroeconomics

6000-445: The economy to come to short run equilibrium at levels that are different from the full employment rate of output. These fluctuations express themselves as the observed business cycles. Keynesian models do not necessarily imply periodic business cycles. However, simple Keynesian models involving the interaction of the Keynesian multiplier and accelerator give rise to cyclical responses to initial shocks. Paul Samuelson 's "oscillator model"

6100-699: The economy. However, this was followed by stagflation in the 1970s, which discredited the theory. The second declaration was in the early 2000s, following the stability and growth in the 1980s and 1990s in what came to be known as the Great Moderation . Notably, in 2003, Robert Lucas Jr. , in his presidential address to the American Economic Association , declared that the "central problem of depression-prevention [has] been solved, for all practical purposes." Various regions have experienced prolonged depressions , most dramatically

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6200-492: The eleventh of November, in the Reign of our Sovereign Lord King James , of England , France , and Ireland , the eighteenth, and of Scotland the fifty-fourth, Anno Domini ; 1620. The document was signed on November 21 [ O.S. November 11]. A list of 41 male passengers who signed the document was supplied by Bradford's nephew Nathaniel Morton in his 1669 New England's Memorial . Thomas Prince first numbered

6300-453: The existence of K-Waves, but also and for the first time an explanation for the timing of a K-Wave (≈60 years = two generations). A specific modification of the theory of Kondratieff cycles was developed by Daniel Šmihula . Šmihula identified six long-waves within modern society and the capitalist economy, each of which was initiated by a specific technological revolution: Unlike Kondratieff and Schumpeter, Šmihula believed that each new cycle

6400-521: The existence of business cycles, blamed them on external factors, notably war, or only studied the long term. Sismondi found vindication in the Panic of 1825 , which was the first unarguably international economic crisis, occurring in peacetime. Sismondi and his contemporary Robert Owen , who expressed similar but less systematic thoughts in 1817 Report to the Committee of the Association for

6500-406: The first and second short columns into the first long column, and similarly for the other columns. Prince numbered the names in their original 1669 Morton order. He added titles (Mr. or Capt.) to 11 names that were given those titles by William Bradford in the list of passengers at the end of his manuscript. The following list of signers is organized into the six short columns of Morton (1669) with

6600-444: The first real constitution of modern times. It was democratic, an acknowledgment of liberty under law and order and the giving to each person the right to participate in the government, while they promised to be obedient to the laws. But the really wonderful thing was that they had the power and strength of character to abide by it and live by it from that day to this. Some governments are better than others. But any form of government

6700-698: The fluctuations of a business cycle are attributable to external (exogenous) versus internal (endogenous) causes. In the first case shocks are stochastic, in the second case shocks are deterministically chaotic and embedded in the economic system. The classical school (now neo-classical) argues for exogenous causes and the underconsumptionist (now Keynesian) school argues for endogenous causes. These may also broadly be classed as "supply-side" and "demand-side" explanations: supply-side explanations may be styled, following Say's law , as arguing that " supply creates its own demand ", while demand-side explanations argue that effective demand may fall short of supply, yielding

6800-484: 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), Andrey Korotayev and Carlota Perez . Perez (2002) places

6900-488: The idea that they are caused by random shocks. Due to this inherent randomness, recessions can sometimes not occur for decades; for example, Australia did not experience any recession between 1991 and 2020. While economists have found it difficult to forecast recessions or determine their likely severity, research indicates that longer expansions do not cause following recessions to be more severe. According to Keynesian economics , fluctuations in aggregate demand cause

7000-435: The level of other, older, more traditional sectors. It is a situation when the new technology, which originally increased a capacity to utilize new sources from nature, reached its limits and it is not possible to overcome this limit without an application of another new technology . At the end of an application phase of any wave there is typically an economic crisis and economic stagnation . The financial crisis of 2007–2008

7100-581: The macroeconomy and thus investment and firms' profits. Usually such sources are unpredictable in advance and can be viewed as random "shocks" to the cyclical pattern, as happened during the 2007–2008 financial crises or the COVID-19 pandemic . The first systematic exposition of economic crises , in opposition to the existing theory of economic equilibrium , was the 1819 Nouveaux Principes d'économie politique by Jean Charles Léonard de Sismondi . Prior to that point classical economics had either denied

7200-514: The market economy as due to exogenous influences, such as the State or its regulations, labor unions, business monopolies, or shocks due to technology or natural causes. Contrarily, in the heterodox tradition of Jean Charles Léonard de Sismondi , Clément Juglar , and Marx the recurrent upturns and downturns of the market system are an endogenous characteristic of it. The 19th-century school of under consumptionism also posited endogenous causes for

7300-486: The market will move from crisis to crisis. This division is not absolute – some classicals (including Say) argued for government policy to mitigate the damage of economic cycles, despite believing in external causes, while Austrian School economists argue against government involvement as only worsening crises, despite believing in internal causes. The view of the economic cycle as caused exogenously dates to Say's law, and much debate on endogeneity or exogeneity of causes of

7400-412: The market, lasting more than a few months, normally visible in real GDP , real income, employment, industrial production, and wholesale-retail sales." Business cycles are usually thought of as medium term evolution. They are less related to long-term trends, coming from slowly-changing factors like technological advances. Further, a one period change, that is unusual over the course of one or two years,

7500-523: The modern age (after 1600 AD) only as a part of a much longer "chain" of technological revolutions going back to the pre-modern era. It means he believes that we can find long economic cycles (analogical to Kondratiev cycles in modern economy) dependent on technological revolutions even in the Middle Ages and the Ancient era . Long wave theory is not accepted by many academic economists. However, it

7600-591: The most recent metaparadigm aims at transforming information . It started out with the proliferation of communication and stored data and has now entered the age of algorithms , which aims at creating automated processes to convert the existing information into actionable knowledge. Several papers on the relationship between technology and the economy were written by researchers at the International Institute for Applied Systems Analysis (IIASA). A concise version of Kondratiev cycles can be found in

7700-472: The movement of the general price level - prices expressed in gold - in the US and the UK since 1890 and identifies three long cycles with troughs ca. in 1895, 1939 and 1982. With this model 2018 was another trough between the third and a possible future fourth cycle. Kondratiev identified three phases in the cycle, namely expansion, stagnation and recession . More common today is the division into four periods with

7800-407: The names in his 1736 A Chronological History of New-England in the form of Annals . The original document has been lost, so Morton is the sole source for the signers. He probably had access to the original document, but he could not have known the actual order in which it was signed simply by inspecting it. Morton's arrangement of names might not have been the arrangement on the original document, and

7900-494: The names on the original may not have been arranged in any orderly fashion. Prince's numbers are based solely on Morton, as he himself stated. Morton's list of names was unnumbered and untitled in all six editions (1669–1855), although their order changed with successive editions. In his original 1669 edition, the names were placed on two successive pages forming six short columns, three per page. In subsequent editions, these six short columns were combined into three long columns on

8000-427: The numbers and titles of Prince. The names are given their modern spelling according to Morison. Use the numbers for the order used by genealogists and half of unnumbered lists (Samuel Fuller will be the eighth name), but merge the half columns vertically into full columns for the order used by the other half of unnumbered lists (John Turner will be the eighth name). On November 23, 1920, at a commemoration ceremony for

8100-456: The other hand, 1893's global economic panics were not met with sufficient wealth-distributing government policies internationally, and a dozen major revolutions resulted, which some argue were significant causes of World War I. Few would argue against the assertion that World War II began in response to the economic strictures of World War I's Treaty of Versailles and the failure to create government policy that supported economic opportunity during

8200-400: The other on the credit cycle . Additionally, there are several versions of the technological cycles and they are best interpreted using diffusion curves of leading industries. For example, railways only started in the 1830s, with steady growth for the next 45 years. It was after Bessemer steel was introduced that railroads had their highest growth rates. However, this period is usually labeled

8300-574: The overall GDP and reflects the real state of the economy. According to Stock and Watson, unemployment claim can predict when the business cycle is entering a downward phase. Banbura and Rüstler argue that industry production's GDP information can be delayed as it measures real activity with real number, but it provides an accurate prediction of GDP. Series used to infer the underlying business cycle fall into three categories: lagging , coincident , and leading . They are described as main elements of an analytic system to forecast peaks and troughs in

8400-508: The overall level of debt shrinking (deflating). Hence, 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 of John Maynard Keynes in Keynesian economics , but it has enjoyed a resurgence of interest since the 1980s, both in mainstream economics and in

8500-477: The period since the Industrial Revolution, technological progress has had a much larger effect on the economy than any fluctuations in credit or debt, the primary exception being the Great Depression, which caused a multi-year steep economic decline. The effect of technological progress can be seen by the purchasing power of an average hour's work, which has grown from $ 3 in 1900 to $ 22 in 1990, measured in 2010 dollars. There were similar increases in real wages during

8600-514: The phases on a logistic or S curve, with the following labels: the beginning of a technological era as irruption, the ascent as frenzy, the rapid build out as synergy and the completion as maturity. Because people have fairly typical spending patterns through their life cycle, such as spending on 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

8700-498: The relation between oil-prices and real GDP. The methodology uses a statistical model that incorporate level shifts in the price of crude oil; hence the approach describes the possibility of oil price shocks and forecasts the likelihood of such events. Economic indicators are used to measure the business cycle: consumer confidence index , retail trade index , unemployment and industry/service production index . Stock and Watson claim that financial indicators' predictive ability

8800-524: The sake of order and survival. Similar arguments had been unsuccessfully made by the shipwrecked passengers of the Sea Venture , a similar, earlier group bound for the Colony of Virginia, and specifically by one Stephen Hopkins , who had, as a result, been convicted of mutiny and sentenced to death, but pardoned, and is thought to be the Stephen Hopkins aboard the Mayflower and among

8900-864: The so-called recurrence quantification correlation index to test correlations of RQA on a sample signal and then investigated the application to business time series. The said index has been proven to detect hidden changes in time series. Further, Orlando et al., over an extensive dataset, shown that recurrence quantification analysis may help in anticipating transitions from laminar (i.e. regular) to turbulent (i.e. chaotic) phases such as USA GDP in 1949, 1953, etc. Last but not least, it has been demonstrated that recurrence quantification analysis can detect differences between macroeconomic variables and highlight hidden features of economic dynamics. The Business Cycle follows changes in stock prices which are mostly caused by external factors such as socioeconomic conditions, inflation, exchange rates. Intellectual capital does not affect

9000-482: The study of economic fluctuation rather than a "business cycle" – though some economists use the phrase 'business cycle' as a convenient shorthand. For example, Milton Friedman said that calling the business cycle a "cycle" is a misnomer , because of its non-cyclical nature. Friedman believed that for the most part, excluding very large supply shocks, business declines are more of a monetary phenomenon. Arthur F. Burns and Wesley C. Mitchell define business cycle as

9100-466: The theory, the consensus is that it involves recognizing patterns that may not exist ( apophenia ). The Soviet economist Nikolai Kondratiev (also written Kondratieff or Kondratyev) was the first to bring these observations to international attention in his book The Long Waves in Economic Life (1926) alongside other works written in the same decade. In 1939, Joseph Schumpeter suggested naming

9200-436: The timing of recessions, stock market peaks and stock market crashes over the past couple of decades". The historian Eric Hobsbawm also 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". US economist Anwar Shaikh analyses

9300-465: The west to be purchased and after four or five years to be cleared and be in production, driving down prices and causing a depression as in 1819 and 1839. By the 1850s, the U.S. was becoming industrialized. The technological cycles can be labeled as follows: Some argue that this logic can be extended. The custom of classifying periods of human development by its dominating general purpose technology has surely been borrowed from historians, starting with

9400-517: The work of Robert Ayres (1989) in which he gives a historical overview of the relationships of the most significant technologies. Cesare Marchetti published on Kondretiev waves and on the diffusion of innovations. Arnulf Grübler's book (1990) gives a detailed account of the diffusion of infrastructures including canals, railroads, highways and airlines, with findings that the principal infrastructures have midpoints spaced in time corresponding to 55-year K wavelengths, with railroads and highways taking almost

9500-466: The world GDP dynamics at an acceptable level of statistical significance. Korotayev & Tsirel also detected shorter business cycles, dating the Kuznets to about 17 years and calling it the third sub-harmonic of the Kondratiev, meaning that there are three Kuznets cycles per Kondratiev. Recurrence quantification analysis has been employed to detect the characteristic of business cycles and economic development . To this end, Orlando et al. developed

9600-458: The worst excesses of business cycles, and automatic stabilization due to the aspects of the government 's budget also helped mitigate the cycle even without conscious action by policy-makers. In this period, the economic cycle – at least the problem of depressions – was twice declared dead. The first declaration was in the late 1960s, when the Phillips curve was seen as being able to steer

9700-403: Was largely rejected. There has been some resurgence of neoclassical approaches in the form of real business cycle (RBC) theory. The debate between Keynesians and neo-classical advocates was reawakened following the recession of 2007. Mainstream economists working in the neoclassical tradition, as opposed to the Keynesian tradition, have usually viewed the departures of the harmonic working of

9800-545: Was reprinted in Purchas his Pilgrimes (1625); hand-written by William Bradford in his journal Of Plimoth Plantation (1646); and printed by Bradford's nephew Nathaniel Morton in New-Englands Memorial (1669). The three versions differ slightly in wording and significantly in spelling, capitalization, and punctuation. William Bradford wrote the first part of Mourt's Relation , including its version of

9900-518: Was signed aboard ship on November 21 [ O.S. November 11], 1620. Signing the covenant were 41 of the ship's 101 passengers; the Mayflower was anchored in Provincetown Harbor within the hook at the northern tip of Cape Cod . The Pilgrims had originally hoped to reach America in early October using two ships, but delays and complications meant they could use only one, the Mayflower . Their intended destination had been

10000-720: Was the first governing document of Plymouth Colony . It was written by the men aboard the Mayflower , consisting of Separatist Puritans , adventurers, and tradesmen. Although the agreement contained a pledge of loyalty to the King , the Puritans and other Protestant Separatists were dissatisfied with the state of the Church of England , the limited extent of the English Reformation and reluctance of King James I of England to enforce further reform. The Mayflower Compact

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