Long Waves and Economic Growth: A Critical Appraisal

Abstract

No one who has examined the dynamics of capitalist economies over historical periods can doubt that they experience significant long-term variations in their aggregate performance. The question is whether these long-term variations are more than the outcome of a summation of random events, and further, whether they exhibit recurrent temporal regularities that are sufficiently well-behaved to call them long In recent years there has been a strong resurgence of interest in such long-term movements, since their existence could provide a coherent explanation for the poor performance of capitalist economies over the past decade. We do not attempt herein to examine the historical evidence for cycles. We have in fact examined this evidence and find it unconvincing. Although historical data might conceivably lend some plausibility to the notion of cycles in prices, we remain, at present, sceptical of the case that has so far been made for their presence in real phenomena; that is, in aggregate output or employment. What we offer here, instead, consistent with our present scepticism, is an attempt to examine the economic logic of waves. More specifically, we ask what conditions would need to be fulfilled in order for technological innovation to generate cycles of the periodicity postulated by N. D. Kondratiev and his disciples? It is our view that such a theory, which might account for the presence of cycles in some real economic variable, would have to fulfill a set of logically interdependent requirements. We discuss these requirements under the four categories of causality, timing, economywide repercussions, and recurrence. 1. Causality

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