What is a Kondratieff Wave?
Kondratieff Wave, named after Russian economist Nikolai Kondratieff, refers to cycles, lasting about 40 to 60 years, experienced by capitalist economies. Also known as "Kondratiev waves," "super-cycles," "K-waves," "surges," and/or "long waves."
- Kondratieff Wave, named after Russian economist Nikolai Kondratieff, refers to cycles, lasting about 40 to 60 years, experienced by capitalist economies.
- A Kondratieff Wave is a long-term economic cycle, characterized by periods of evolution and self-correction, brought about by technological innovation that results in a long period of prosperity.
- Kondratieff Waves are relegated to a branch of economics called "heterodox economics," in that it does not conform to the widely accepted, orthodox theories espoused by economists.
Understanding Kondratieff Waves
A Kondratieff Wave is a long-term economic cycle believed to be born out of technological innovation, which results in a long period of prosperity. This theory was founded by Nikolai D. Kondratieff (also spelled "Kondratiev"), a communist Russia-era economist who noticed agricultural commodity and copper prices experienced long-term cycles. Kondratieff believed that these cycles involved periods of evolution and self-correction.
Economists have identified the following Kondratieff Waves since the 18th century.
- The first resulted from the invention of the steam engine and ran from 1780 to 1830.
- The second cycle arose because of the steel industry and the spread of railroads, and ran from 1830 to 1880.
- The third cycle resulted from electrification and innovation in the chemical industry, and ran from 1880 to 1930.
- The fourth cycle was fueled by autos and petrochemicals, and lasted from 1930 to 1970.
- The fifth cycle was based on information technology and began in 1970 and ran through the present, though some economists believe we are at the start of a sixth wave that will be driven by biotechnology and healthcare.
Additionally, each cycle can have four sub-cycles, or phases, that have been dubbed after seasons.
- Spring: Increase in productivity, along with inflation, signifying an economic boom.
- Summer: Increase in the general affluence level leads to changing attitudes toward work that results in a deceleration of economic growth.
- Autumn: Stagnating economic conditions give rise to a deflationary growth spiral that gives rise to isolationist policies, further curtailing growth prospects.
- Winter: Economy in the throes of a debilitating depression that tears the social fabric of society, as the gulf between the dwindling number of "haves" and the expanding number of "have-nots" increases dramatically.
Nikolai D. Kondratieff's Fate
Kondratieff Waves are relegated to a branch of economics called "heterodox economics," in that it does not conform to the widely accepted, orthodox theories espoused by economists. The theory was also not welcomed in Kondratieff's Russia. His views were anathema to communist officials, especially Josef Stalin, because they suggested that capitalist nations were not on an inevitable path to destruction but, rather, that they experienced ups and downs. As a result, he ended up in a concentration camp in Siberia, and was shot by firing squad in 1938.