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.
Academic Research on Kondratieff cycle
- A Spectral Analysis of the Kondratieff Cycle, Ewijk, C. V. (1982). A Spectral Analysis of the KondratieffCycle. Kyklos, 35(3), 468-499. This chapter analyzes the entire cycle of the Kondratieff Wave including its long-term economic cycle which was believed to have resulted from technological innovation and which produced a long prosperous economic period. The theory was founded by Dr. Nikolai Kondratieff, a prominent Communist who took over the Russian economic era and noticed that the agricultural commodity underwent major long-term cycles. He believed that these cycles comprised of evolution as well as self-control.
- Leadership in the sixth waveexcursions into the new paradigm of the Kondratieff cycle 20102050, Wilenius, M. (2014). European Journal of Futures Research, 2(1), 36. This article addresses the aspect of leadership in businesses as well as societies especially when it comes to the application of Kondratieff's long wave cycles. The main framework of the research paper and investigation is the socio-economic theory that was developed by Dr. Nikolai Kondratieff. In the argument, he states that long waves in the economic sector will affect modern economies since they have a direct impact on people's lives with respect to consumer's purchasing power. The trend which entails a new wave power will be critical challenges especially to the development of various economies. As such, Nikolai Kondratieff argues that there should be three leadership trends that will govern the cycles in order to help organizations stabilize in an eruptive economic cycle. One, how to come up with a vision that will motivate the people, two, how to strategically align the mission of the business with its results in a social setting and three, how to create an effective learning institution that will support the learning processes of the economy. The three leadership elements have since been observed.
- Rostow's Kondratieff Cycle in Australia, Pope, D. (1984). The Journal of Economic History, 44(3), 729-753. In this paper, the researcher highly correlates the events of the great inflation of the 1970s with a series of ideas regarding the long economic waves of Dr. Nikolai Kondratieff. It is established that these cycles have progressively impacted the economy of Australia to the extent of attracting social scientists from every part of the world to assess the series of events that crippled the economy. A lot of focus and emphasis is placed on the value and importance of various exporters of perishable products such as food and raw materials in the economic world. In this case, Australia is the model of study. The states economy over a span of ten years is explored. Research indicates that theres hardly a relationship between the Kondratieff Cycle and the Australian economy.
- Industrial port areas and the Kondratieff cycle, Hanappe, P., & Savy, M. (1981). CITYPORT INDUSTRIALIZATION AND REGIONAL DEVELOPMENT: SPATIAL ANALYSIS AND PLANNING STRATEGIES EDITED BY BS HOYLE AND DA PINDER. This paper analyses the post-war evolution and its correlation with the Kondratieff cycle. As it occurred, the 19th century was crippled with a significant amount of social transitions included the abolition of slaves and the First as well as the Second Industrial Revolution that led to massive urbanization as well as higher levels of productivity. The post-war era is highly likened to the events of the Kondratieff cycle where there's a lot of urbanization in the sector of port industrialization. The period culminates with an upswing move that brings forth a revolutionary period in different areas of the economy. As such, a vital aspect of the international scene has strengthened the division of labor.
- Some demographic and social processes and the problem of Kondratieff cycle periodicity, Screpanti, E. (1989). In Technological and Social Factors in Long Term Fluctuations(pp. 114-129). Springer, Berlin, Heidelberg. This article looks at the implications of the Kondratieff cycle of theory on different phases of the economic sector. It states that the argument is not sufficiently reliable since it requires people to wait for two more decades in order to establish the empirical evidence and be on the right path toward creating results that would bring forth confidence in what the theory suggests to hold for the world's economy. Perhaps the central issue of this theory is not the content but the periodical differences that exist between the phases of the cycle. The question revolves around why a cycle is a spear along fifty years. In the end, no one can give a valid explanation to defend the occurrence of events as they are aligned.
- Human behaviors encountered during the different phases of the Kondratieff cycle, Modis, T. (2006). NATO SECURITY THROUGH SCIENCE SERIES E HUMAN AND SOCIETAL DYNAMICS, 5, 195. This article sheds some light on the value of the Kondratieff cycle in business, its characteristics and impact on behavioral changes. It is assessed that the cycle comes in different traits at various phases such that one stage is not similar to the other. As seasons go by, it becomes apparent that difficult economic situations follow each other. Periods of maturity from the economic waves are coupled with preoccupation. On the other hand, difficult periods stimulate lesser economic activities. Similarly, society encounters different phases of the same cycle so much such that every aspect has its impact on consumers.
- The information revolution: information systems and the 6th Kondratieff cycle, Adams, C., & Mouatt, S. (2010). In MCIS 2010 Proceedings. This paper extensively disintegrates the 6th Kondratieff cycle and its impact on the economic environment surrounding information systems. The research analysis classifies the initial innovative surges as the fifth cycle of the economic wave whereas the sixth is set to be experienced in the near future. It was established that the fifth phase of the economic events is incorrect such that it needs to be classified as the sixth cycle because of the characteristics of its defining features. This paper also highlights defining features of the 6th Kondratieff cycle while arguing that its the leading feature of the IS mindset. The research analysis brings with it tools to assist examine the directions of the revolution.
- Transport and the Kondratieff business cycle, Kuiler, H. C. (1981). International Journal of Transport Economics/Rivista internazionale di economia dei trasporti, 151-164. This chapter carefully examines and presents a historical analysis of the waves of the Kondratieff Cycle. In particular, research delves into the transport system between 1949 and 1993 and how these waves have affected it. It was established that the K effect had fostered various interactions between the metal sector as well as the transport sector such that there is a huge comparison between the two revolutions of transport. In the first cycle, the transport sector was experiencing a slightly lower economic activity while in the second phase it encountered a growing movement that profoundly impacted it. These fluctuations led to some form of growth.
- A Long Range View Based On The Kondratieff Cycle, Stokes, C. J. (1980). Business Economics, 20-23. The objective of the study is to analyze Kondratieff Nikolai's long wave theory. These waves have been described as noticeable in various developed capitalist countries such as France, Germany, as well as the United Kingdom. The long cycles analysis is used in many economic situations coupled with historical data from different states as mentioned above. By analyzing the historical facts of the linear curve, the research can conclude that, in the long run, economic growth doesn't assume the linear curve. However, it grows in a viable trend that takes a sinusoidal form. Such fluctuations consist of a single full sinusoid cycle that makes several long cycles of the Kondratieff. The length of one period is about 54 years. However, the intensities are different.
- The New Kondratieff Cycle and Greentech Innovation, Roxana, T. C., & Vasile, B. (2012). Ovidius University Annals, Economic Sciences Series, 12(1), 685-690. This article points out the X factor, which is the green economic growth equation that matters in most parts of the world. However, one is never quite sure just by how much. Annual forecasts of various gross domestic products are of no help. Therefore, the Kondratieff cycles seek to analyze the concept of the green economy and how it has been affected by green tech innovation. The paper intends to garner the contributions of other researchers and bringing them into the table for assessment. It was also discussed that the K effect on new technology is an economic paradigm. While the green economy is made to be beneficial to the business landscape, it's also profoundly affected by political forces that hail from the K effect.
- Long Cycles of Economic Growth: Does the Kondratieff Cycle Still Survive Today?, Dupriez, L. H. (1965). In Problems in Economic Development (pp. 530-552). Palgrave Macmillan, London. This paper seeks to validate the relevance of Kondratieff in the current world. It provides a short analysis of the long cycles and their presence in the economic sector. It also addresses the different periods of the entire phase of the financial season that has been spread of 54 years. The ideas of long waves in the economic world have developed over the past few years such that every year has a unique phase. With that said, every wave has its financial turmoil and impact which affects economists and the rest of the world with consumers being at the frontline. The theory of a life cycle of a product in the economic sector is also highlighted. Old technology is optimal for some time. This implies that the K effect will subside depending on the stage of innovation and its impact on the sector.