On the mathematic prediction of economic and social crises: toward a harmonic interpretation of the Kondratiev wave
AbstractIn Part One of this paper we use the harmonic analogy of a musical octave to analyze mathematic ratios of U.S. real GNP. These ratios are generated by bringing together figures for U.S. real GNP over intervals of time – “spreads of years” – as numerator and denominator in a single fraction. Using a range of 7-year to 18-year “spreads,” we find that this approach provides strong evidence that American economic history is composed of four 14-year quarter-cycles within a 56 year circuit in the real GNP of the United States, 1869-2007. These periods correlate closely with analysis by Nickolai Kondratiev and provide a framework for predicting an annual steady state rate of growth for the United States falling between 3.4969% and 3.4995% per year. In Part Two of this paper we provide three postscripts including: (1) correlations / speculations on the political and social consequences of this model, (2) simplification / expansion of the geometries implied and (3) analysis / prediction based upon this approach, as concluded by a brief afterword. These post-script refinements narrow the steady state rate of growth predicted to between 3.4969% and 3.4973% per year correlating closely with the 3.4971% rate for annualized quarterly data calculated for Okun’s Law, 1947-2007. The size and interconnectedness of world economies, and the virtually exact correlations provided herein, suggest that the dates predicted for future crises will see changes which are unexpectedly global, dramatic and fierce.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37771.
Date of creation: 30 Mar 2012
Date of revision:
Real GNP; Golden Mean; Phi; Long Wave; Kondratiev Wave; Global Financial Crisis; Constitutional Law; American Economic History; Revolution; Consolidation; GNP Spiral; Okun’s Law; “The Great Moderation; ” Constitutional Amendments; Steady-state Rate of Growth;
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- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- A10 - General Economics and Teaching - - General Economics - - - General
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- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- Z0 - Other Special Topics - - General
- B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
- K19 - Law and Economics - - Basic Areas of Law - - - Other
- B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
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- Sowell, Fallaw, 1992. "Modeling long-run behavior with the fractional ARIMA model," Journal of Monetary Economics, Elsevier, vol. 29(2), pages 277-302, April.
- Solomou,Solomos, 1990. "Phases of Economic Growth, 1850–1973," Cambridge Books, Cambridge University Press, number 9780521389044, April.
- Cochrane, John H, 1988. "How Big Is the Random Walk in GNP?," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 893-920, October.
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