In 1926, Nicolai Kondratieff (1892-1938), at that time the head of Russia’s Economic Research Institute in Moscow, published a technical paper in a German statistical journal documenting the discovery of a 60-year ‘long wave’ in modern economies, starting in the eighteenth century. On this basis, he forecast a depression period for the 1930s, at the completion of the third Kondratieff wave.
Although a communist himself, he opposed the Stalinist elimination of the market mechanism, resulting in him being sent to Siberia and executed for ‘anticommunist agitation’. Joseph Schumpeter, and Nobel laureates Simon Kuznets and Jan Tinbergen have substantiated the validity of Kondratieff’s findings. It has also become clear that the Kondratieff cycle is not just an economic phenomenon, but is driven by technological and societal shifts.
This appendix describes the five waves already experienced so far, as well as the sixth, expected to play out over the next decades. Each long wave relates to a technological breakthrough called a ‘core innovation’ initially working itself through the economy as a powerful growth carrier. As its effect on the economy wears out, an economic downturn occurs and the impact of the next core innovation begins to manifest.
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