The Recurrence of Long Cycles: Theories, Stylized Facts and Figures

Tsoulfidis, Lefteris; Papageorgiou, Aris

doi:10.13169/worlrevipoliecon.10.4.0415

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World Review of Political Economy

Volume 10, Issue 4

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The Recurrence of Long Cycles: Theories, Stylized Facts and Figures

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Author(s): Lefteris Tsoulfidis , Aris Papageorgiou

Publication date (Print): 1 December 2019

Journal: World Review of Political Economy

Publisher: Pluto Journals

Keywords: long cycles, innovations, profit rate, logistic curves

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Abstract

Basic innovations and their diffusion, the expansion or contraction of the level of economic activity and the volume of international trade, rising sovereign debts and their defaults, conflicts and the outbreak of wars, are some of the major phenomena appearing during the downswing or upswing phases of long cycles. In this article, we examine the extent to which these phenomena constitute stylized facts of the different phases of long cycles which recur quite regularly in the turbulent economic history of capitalism. The main argument of this paper is that the evolution of long cycles is a result of the long-run movement of profitability. During the downswing of a long cycle, falling profitability induces innovation investment and the associated with it “creative destruction” of the capital stock that eventually set the stage for the upswing phase of a new long cycle.

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Author and article information

Journal

Journal ID (doi): 10.2307/j50005553

Journal ID (jcode): worlrevipoliecon

Title: World Review of Political Economy

Publisher: Pluto Journals

ISSN: 2042-891X

ISSN: 2042-8928

Publication date (Print): 1 December 2019

Volume: 10

Issue: 4 ( doiID: 10.13169/worlrevipoliecon.10.issue-4 )

Pages: 415-448

Article

Publisher ID: worlrevipoliecon.10.4.0415

DOI: 10.13169/worlrevipoliecon.10.4.0415

SO-VID: d661b108-4d51-49d3-becf-a3daa6801b9c

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lang eng

ScienceOpen disciplines: Political economics

Keywords: long cycles,innovations,profit rate,logistic curves

References

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Comments

Comment on this article

[1] Bank of England. 2015. “Three Centuries of Macroeconomic Data.” Accessed December 13, 2018. www.bankofengland.co.uk/research/Pages/datasets/default.aspx#threecenturies.

[2] Bolotin, M., and T. Devezas. 2017.“Distribution and Clusters of Basic Innovations.” In Industry 4.0: Entrepreneurship and Structural Change in the New Digital Landscape, edited by T. Devezas, J. Leitao, and A. Sarygulov, 117-135. New York: Springer.

[3] Bureau of Economic Analysis. 2016. “NIPA Tables.” Accessed December 13, 2018. bea.gov/national/nipaweb/DownSS2.asp.

[4] Clark, J., C. Freeman, and L. Soete. 1981. “Long Waves and Technological Developments in the 20th Century.” In Konjunktur, Krise, Gesellschaft [Business Cycles, Crisis, Society], edited by D. Petzina and G. van Roon, 132–169. Stuttgart: Klett-Cotta.

[5] Clark, J., C. Freeman, and L. Soete. 1984. “Long Waves, Inventions, and Innovations.” In Long Waves in the World Economy, edited by C. Freeman, 68–70. London: Frances Pinter.

[6] de Groot, B., and P. H. Franses. 2009. “Cycles in Basic Innovations.” Technological Forecasting and Social Change 76 (8): 1021–1025.

[7] de Wolff, S. (1924) 1999. “Phases of Prosperity and Depression.” In The Foundations of Long Wave Theory, vol. I, edited by F. Louça and J. Reijnders, 25–44. Cheltenham: Edward Elgar.

[8] Freeman, C., J. Clark, and L. Soete. 1982. Unemployment and Technical Innovation: A Study of Long Waves and Economic Development. London: Frances Pinter.

[9] Freeman, C., and F. Louça. 2001. As Time Goes By: From the Industrial Revolutions to the Information Revolution. Oxford: Oxford University Press.

[10] Gordon, R. J. 2014. “The Demise of US Economic Growth: Restatement, Rebuttal, and Reflections.” NBER Working Paper. Accessed December 13, 2018. www.nber.org/papers/w19895.

[11] Grubler, A. 1990. The Rise and Fall of Infrastructures: Dynamics of Evolution and Technological Change in Transport. Heidelberg: Physica-Verlag.

[12] Haustein, H. D., and E. Neuwirth. 1982. “Long Waves in World Industrial Production, Energy Consumption, Innovations, Inventions, and Patents and their Identification by Spectral Analysis.” Technological Forecasting and Social Change 22 (1): 53–89.

[13] Hobsbawm, E. 1999. Industry and Empire. London: Penguin.

[14] Jastram, R. 2009. The Golden Constant: The English and American Experience 1560–2007. Cheltenham: Edward Elgar.

[15] Johnston, L., and S. Williamson. 2017. “What Was the US GDP Then?” Measuring Worth, 2017. Accessed December 13, 2018. www.measuringworth.com/usgdp.

[16] Kleinknecht, A. 1990. “Are There Schumpeterian Waves of Innovation.” Cambridge Journal of Economics 14 (1): 81–92.

[17] Kleinknecht, A., and van der Panne. 2008. “Technology and Long Waves in Economic Growth.” In The Elgar Companion to Social Economics, edited by J. B. Davis and W. Dolfsma, 597–606. Cheltenham: Edward Elgar.

[18] Kondratiev, N. D. (1935) 1998. “Long Cycles of Economic Conjuncture.” In The Works of Nikolai D. Kondratiev, vol. I, edited by N. Makasheva and W. J. Samuels, 25–63. London: Pickering & Chatto.

[19] Kondratiev, N. D. 1984. Long Wave Cycle. New York: Richardson & Snyder.

[20] Krugman, P. 2016. “Robber Baron Recessions.” New York Times, April 16. Accessed December 13, 2018. www.nytimes.com/2016/04/18opinionrobber-baron-recessions.html.

[21] Kuczynski, T. 1980. “Have There Been Differences between the Growth Rates in Different Periods of the Development of the Capitalist World Economy since 1850? An Application of Cluster Analysis in Time Series Analysis.” In Historical Social Research: The Use of Historical and Process-Produced Data, edited by J. M. Clubb and E. K. Scheuch, 310–316. Stuttgart: Klett-Cotta.

[22] MacAvoy, P. 1988. Explaining Metals Prices: Economic Analysis of Metals Markets in the 1980s and 1990s. Boston, MA: Kluwer Academic Publishers.

[23] Mahdavi, K. B. 1972. Technological Innovation. Stockholm: Beckmans.

[24] Malloy, M. 1994. Profitability, Long-Term Phases of Accumulation and the Great Depression: New Evidence and Interpretation. PhD thesis, New School for Social Research (Undeposited draft in the possession of Charles Post, Executor Mary C. Malloy Estate; cited with approval).

[25] Marchetti, C. 1980. “Society as a Learning System: Discovery, Invention and Innovation Cycles Revisited.” Technological Forecasting and Social Change 18 (4): 267–282.

[26] Marchetti, C. 1991. “On Savings Banks: Modeling the Diffusion of the Savings Banks Idea in Italy and the Performance of these Banks over Two Centuries.” Accessed December 13, 2018. http://pure.iiasa.ac.at/id/eprint/11926/.

[27] Marx, K. 1981. Capital. Volume III. London: Penguin.

[28] Mejorado, A., and M. Roman. 2014. Profitability and the Great Recession. New York: Routledge. Mejorado, A., and M. Roman. 2017. “Profitability and Secular Stagnation: The Missing Link.” International Journal of Political Economy 46 (2–3): 150–166.

[29] Mensch, G. 1979. Stalemate in Technology. Cambridge, MA: Ballinger Publishing Company.

[30] Mensch, G. 1981. “Long Waves and Technological Developments in the 20th Century: Comment.” In Konjunktur, Krise, Gesellschaft [Business Cycles, Crisis, Society], edited by D. Petzina and G. van Roon, 132–169. Stuttgart: Klett-Cotta.

[31] Officer, L., and S. H. Williamson. 2016. “The Price of Gold, 1257 to Present.” Accessed December 13, 2018. www.measuringworth.com/gold.

[32] Papageorgiou, A., and L. Tsoulfidis. 2006. “Kondratiev, Marx and the Long Cycle.” Indian Development Review 4 (1): 93–106.

[33] Perez, C. 2002. Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Cheltenham: Edward Elgar.

[34] Schumpeter, J. 1939. Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process. 2 vols. New York: McGraw-Hill.

[35] Shaikh, A. 1992. “The Falling Rate of Profit as the Cause of Long Waves: Theory and Empirical Evidence.” In New Findings in Long Wave Research, edited by A. Kleinknecht, E. Mandel and I. Wallerstein. New York: St. Martin's Press.

[36] Shaikh, A. 2016. Capitalism: Competition, Conflict, Crises. Oxford: Oxford University Press.

[37] Shiller, R. 2018. “Irrational Exuberance.” Accessed December 13, 2018. http://irrationalexuberance.com/main.html?src=%2F.

[38] Silverberg, G., and B. Verspagen. 2003. “Breaking the Waves: A Poisson Regression Approach to Schumpeterian Clustering of Basic Innovations.” Cambridge Journal of Economics 27 (5): 671–691.

[39] Solomou, S. 1986. “Innovation Clusters and Kondratieff Long Waves in Economic Growth.” Cambridge Journal of Economics 10 (2): 101–112.

[40] Summers, L. 2015. “Demand Side Secular Stagnation.” American Economic Review: Papers and Proceedings 105 (5): 60–65.

[41] Tsoulfidis, L. 2017. “Growth Accounting of the Value Composition of Capital and the Rate of Profit in the US Economy: A Note Stimulated by Zarembka's Findings.” Review of Radical Political Economics 49 (2): 303–312.

[42] Tsoulfidis, L., and P. Tsaliki. 2014. “Unproductive Labour, Capital Accumulation and Profitability Crisis in the Greek Economy.” International Review of Applied Economics 28 (5): 562–585.

[43] Van Duijn, J. J. 1983. The Long Wave in Economic Life. London: George Allen & Unwin.

[44] Van Gelderen, J. (1913) 1996. “Springtide: Reflections on Industrial Development and Price Movements.” In Long Wave Theory, edited by C. Freeman, 1–56. Cheltenham: Edward Elgar.

[45] Williamson, S. 2017. “S&P Index, Yield and Accumulated Index, 1871 to Present.” Accessed December 13, 2018. www.measuringworth.com/datasets/sap.