Edited by John B. Davis and Wilfred Dolfsma
Chapter 37: Technology and long waves in economic growth
Many people have accepted the existence of the classical business cycle of seven to ten years in length, sometimes also referred to as the ‘Juglar cycle’. The idea, however, that there may be a (regular) long-term variation in the speed of economic growth of some 50 years, with 20–25 ‘good’ years being followed by 20–25 ‘bad’ years (the so-called Kondratieff wave) has always remained controversial among economists and economic historians. It is tempting to give some credit to the concept of Kondratieff waves, as it could explain why the dark period between 1929 and World War II has been followed by an unprecedented ‘Golden Age’ of capitalism, lasting up to the early 1970s. After the mid-1970s, there was a growing perception that the good times were passé, but after the mid-1990s, with an upward shift in US productivity growth, we suddenly had euphoria about a ‘new economy’. It is surprising to note that many adherents of the ‘new economy’ did not seem to be aware that many of their observations fitted nicely into the old-fashioned concept of the Kondratieff wave. Ignorance of history can be misleading. Once the hype was over (after the crash of the NASDAQ index in spring of 2000), many believed that the ‘new economy’ story was fake. From the viewpoint of a possible long wave in economic life, however, one tends towards a more positive evaluation.
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