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On the mathematic prediction of economic and social crises: toward a harmonic interpretation of the Kondratiev Wave, revised and corrected, with a new appendix, February 12, 2015

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  • Albers, Scott
  • Albers, Andrew

Abstract

In 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 and an extensive Appendix. 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.

Suggested Citation

  • Albers, Scott & Albers, Andrew, 2015. "On the mathematic prediction of economic and social crises: toward a harmonic interpretation of the Kondratiev Wave, revised and corrected, with a new appendix, February 12, 2015," MPRA Paper 62118, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:62118
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    File URL: https://mpra.ub.uni-muenchen.de/62118/1/MPRA_paper_62118.pdf
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    References listed on IDEAS

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    1. 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.
    2. Albers, Scott & Albers, Andrew L., 2011. "The Golden Mean, the Arab Spring and a 10-step analysis of American economic history," MPRA Paper 33004, University Library of Munich, Germany.
    3. McCauley,Joseph L., 2009. "Dynamics of Markets," Cambridge Books, Cambridge University Press, number 9780521429627, September.
    4. Edward S. Knotek, 2007. "How useful is Okun's law?," Economic Review, Federal Reserve Bank of Kansas City, vol. 92(Q IV), pages 73-103.
    5. McMinn, David, 2011. "9/56 Year Cycle: Californian Earthquakes," MPRA Paper 51663, University Library of Munich, Germany.
    6. John Gowdy & Susan Mesner, 1998. "The Evolution of Georgescu-Roegen's Bioeconomics," Review of Social Economy, Taylor & Francis Journals, vol. 56(2), pages 136-156.
    7. Sowell, Fallaw, 1992. "Modeling long-run behavior with the fractional ARIMA model," Journal of Monetary Economics, Elsevier, vol. 29(2), pages 277-302, April.
    8. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    9. Albers, Scott, 2012. "Predicting crises: Five essays on the mathematic prediction of economic and social crises," MPRA Paper 43484, University Library of Munich, Germany.
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    Cited by:

    1. Nguyen Nancy Duong & Burke Órlaith & Murphy Patrick, 2016. "A Simulation Study of Weighting Methods to Improve Labour-Force Estimates of Immigrants in Ireland," Journal of Official Statistics, Sciendo, vol. 32(3), pages 693-718, September.

    More about this item

    Keywords

    Real GNP; Golden Mean; Phi; Kondratiev Wave; Global Financial Crisis; American Economic History; GNP Spiral; Okun’s Law; Revolution;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • N00 - Economic History - - General - - - General
    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods
    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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