Kondratieff Cycle (Wave) - Explained
What is the Kondratiev Wave?
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Table of ContentsWhat is the Kondratieff Cycle?How is the Kondratiev Wave Used?Academic Research on Kondratieff cycle
What is the Kondratieff Cycle?
In economics, the Kondratieff cycle is a hypothesized cycle-like phenomenon thats found in the modern world economy. Its stated that the period comprised of waves that spread between forty to sixty years and the cycles consist of alternating intervals of high sectoral growth and intervals of substantially slow growth. Many academic economists don't accept the long wave theory. Among the economists who approve it, there is some form of lack of agreement regarding the cause of these waves as well as the beginning and end of years of individual waves. As such, critics of the same theory and consensus have reiterated that it entails recognizing patterns that may not even exist.
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How is the Kondratiev Wave Used?
Kondratiev, a revered Russian economist, was at the forefront of suggesting that industrial economies were susceptible to cycle changes in prices as well as production. The cycle is a liquidity cycle and not that of cost. Rising as well as declining trends for money and labor are an effect. The wave may also emulate inherent cycles of the social process regardless of the The world remembers many heroes of economics, but one of the most revered is Nikolai Kondratiev, who was assassinated by a firing squad that was ordered by Stalin in 1938. The professional died for some factors that he believed was the truth. His execution was ordered following his academic work and input that largely propounded that the capitalist economic system wouldnt collapse because of the great depression that occurred in 1929. Stalin didnt want to hear the truth regarding this matter. Therefore, Nikolai was exterminated with the intention to suppress his work.
The Kondratiev Wave theory explains the long-term boom-bust cycles that exist in capitalists economies around the world. This long-term cycle is often between 40 to 60 years and entails periods of high growth and slow growth in an economy. The Kondratiev Wave was developed in the 18th century and since then, five Kondratiev Waves have been identified by economists. These identified five Kondratiev Waves occurred in;
- 1780 to 1830
- 1830 to 1880
- 1880 to 1930
- 1930 to 1970 1970 to date.
Each of these Kondratiev Waves occurred in different industries such as the steel industry, chemical industry, technology industry, and others.