The Five Cycles Of The Kondratiev Wave

DISCUSSION

What is the 'Kondratiev Wave '

A Kondratief Wave is a long-term economic cycle believed to result from technological innovation and produce a long period of prosperity (Investopedia, n.d). Kondratief believed that these cycles involved periods of evolution and self-correction. It is argued that they could last as long as 40-60 years and that they were linked to innovation and social changes, rather than economic causes(Temple,2011).

Kondratiev cycles do not necessarily apply universally. The theory goes that they tend to be cycles that govern the leading economy of the day and world trade. In the present day context that does perhaps mean they are applicable - albeit in different ways - to the USA and perhaps to China. Kondratiev

Autumn is where investments and economic activity slows but the general population has not move past the lavish spendings that accorded during the summer period thus this leads to high inflation and debt, this finally leads to winter which is characterized by high unemployment and financial crises which leads to the next big thing or other wave(Daily Reckoning,2013) .

The Wave Cycle

Resemblance to the Seasons.

The Five Cycles of the Kondratief Wave

The First Wave; though no exact boundary exist is said to have lasted form the period of

1780 to 1840. It resulted form the invention of the steam engine and some also say that the

Industrial Revolution can be considered as the first wave. The depression was due to the war of 1812(Temple,2011).

The Second Wave lasted between 1840 to 1900. The second cycle arose because of the steel industry and the spread of railroads at the peak. The decline was due to the US Civil War and the 1873 depression. Also Foreign trade could also be seen as part of this wave

(Temple,2011).

The Third Wave runs form 1900 to 1950. It is marked by exploitation of oil, the development of means of mass communication, and the increasing importance of

Some of these products included yarns, thread, silk, metal ware, sugar, oil and butter that were sold throughout the world. Ninety five percent of British imports came from Mughal India but by late 18th century the Mughal empire declined resulting in decreased agricultural production thus negatively affecting the textile industry(Schmidt 2015).

The second cycle; in the early 19th century, the British East India Company 's gradual expansion and consolidation of power brought a major change in taxation and agricultural policies. These promoted commercialization of agriculture with a focus on trade, resulting in decreased production of food crops and mass impoverishment(Roy 2006). It also established a system railways and telegraphs and a civil service that aimed to be free from political interference.(Roy 2006) The collapse of the Soviet Union, [India 's trading partner], and the

Gulf War, resulted in a major balance-of-payments crisis for India(Ghosh , Anurabha 2014).

However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world, with industrial development stalled and agriculture unable to feed a rapidly growing population(Dat and Sundharam