Development and Finance from issue 2010/2

László Gazdag

Long-Term Economic Cycles

- Abstract -

JEL E-32

Kondratiev identified three major, half-century cycles in the development of capitalist economies on the basis of per capita resources (coal, steel, cement, grain, etc.). His followers added a fourth cycle. Although Kondratiev did not precisely specify the start and end points of the cycles, his followers identified them with major historical turning points, thus specifying the dates (or so they believed). The cycles ascend for nearly 30 years and ‘descend’ for nearly 20-25 years. The term descend is incorrect, as we should use the phrase slowing down. The ascendant phase is preceded and prepared by the appearance of new fundamental innovations. Such innovations spread spatially and also in the various fields of activities. When the potential in innovations has been fully exploited, we arrive at an inflection point, and growth is stalled. This is when we arrive at the downward period (or the slowing growth period to be precise), and then new fundamental innovations appear to trigger the new ascendant phase.

László Gazdag, economist, associate professor (Pécs University of Sciences)

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