The Economy as an Evolutionary Pulsator
In economics we commonly have models in search of facts — by contrast, long waves appear to be facts in search of a model. I would like to offer a prospective model. Generally, the shorter the period, the easier it is to explain why a cycle may exist: the best theory is that of the pig cycles, with a period of two lags. Then there is the stocks cycle, the best understood of all generalized economic oscillators. The longer waves of 5–15 years are less evident and have a less agreed-on explanation. Cycles of 40–50 years are difficult to establish and more difficult to explain. To begin with, the 200 or so years of industrial capitalism are too short a time to establish the existence of a cycle from highly disturbed statistical series, so that we do not even know whether there is anything to explain. Second, if a cycle does exist, it is difficult to find a mechanism that remains unchanged for that long a time to produce a cycle. The pronounced turbulence of modern capitalism makes it more or less impossible to determine any constant system parameters.
KeywordsReal Wage Dynamical Coupling Excess Capacity Major Innovation Industrial Capitalism
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