DEFINITION of 'Kondratiev Wave'

A Kondratiev Wave is a long-term economic cycle believed to result from technological innovation and produce a long period of prosperity. This theory was founded by Nikolai D. Kondratiev (also spelled "Kondratieff"), a Communist Russia era economist who noticed agricultural commodity and copper prices experienced long-term cycles. Kondratiev believed that these cycles involved periods of evolution and self-correction.

Also known as "Kondratieff Wave," "supercycle," "K-Wave," "surge" or "long wave."

BREAKING DOWN 'Kondratiev Wave'

Economists have identified five Kondratiev 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. It 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 has lasted to this day. Some economists believe we are at the start of a sixth wave and that this one will bring additional information technology innovation, but will be driven more by biotechnology and healthcare.

What Happened to Nikolai D. Kondratiev?

K-Waves are not widely accepted by economists, and the theory was also not welcomed in Kondratiev's Russia. His views were disliked by Communist officials because they suggested that capitalist nations were not on an inevitable path to destruction, but that they instead only experienced ups and downs. As a result of his seditious writings, Kondratiev was sentenced to serve time at a concentration camp in Siberia, but he was executed there in 1938.

RELATED TERMS
  1. Market Cycles

    Market cycles include four phases of market growth and decline, ...
  2. Industry Life Cycle Analysis

    Industry life cycle analysis is part of fundamental analysis ...
  3. Credit Cycle

    A credit cycle is a cycle involving the access to credit by borrowers, ...
  4. Billing Cycle

    A billing cycle is the interval of time from the end of one billing, ...
  5. Underwriting Cycle

    Underwriting cycle refers to fluctuations in the insurance business ...
  6. Business Cycle Indicators (BCI)

    Business cycle indicators are a composite of leading, lagging ...
Related Articles
  1. Trading

    Introduction to Elliott Wave Theory

    Acquaint yourself with Elliott Wave Theory, the principle built on the discovery that stock markets did not behave in a chaotic manner.
  2. Investing

    Understanding Market and Full Risk Cycles

    Investor need to understand the four stages the markets tend to experience.
  3. Trading

    Elliott Wave In The 21st Century

    Discover new developments that help you apply this difficult theory to trading and how computer power can help reduce the guess-work.
  4. Insights

    The Best Business To Be In During A Recovery (And Why)

    Where are the best places to be when an economy starts to recover?
  5. Trading

    Is It Too Late to Buy Alibaba Stock?

    Alibaba stock is holding near rally highs, while intermediate and long-term cycles predict even higher prices.
  6. Insights

    Why Can't Economists Agree?

    There are many reasons why economists can be given the same data and come up with entirely different conclusions.
  7. Trading

    Will a Rate Hike Appreciate The Dollar Even More? (USD, DXY)

    Many market participants expect the US Dollar to rise after the start of the next rate hike cycle.
RELATED FAQS
  1. What are the most important steps in the accounting cycle?

    Understand the steps in the accounting cycle. Learn about each of the eight steps in the accounting cycle and why each one ... Read Answer >>
Trading Center