What is the Kondratyev Wave Theory?

The "long wave" theory of economic life was first purposed by Nikolai Kondratyev, a Russian economist in the 1920's. His research first translated in English was published in the Quarterly Journal of Economics and proposed that the economy fluctuates between extreme lows and extreme highs a periodicity of approximately 50 years. For a more detailed explanation refer to our introduction.

What is the length of Kondratyev Cycle?

Kondratyev proposed that the length of a cycle varied from 44 to 60 years. Others have stretched this as far as 70 years. All of our work verifies that the time frames are much tighter and consistent to a 53.3 year basis. The consistency of events arising from the "Long Wave" help make it a very accurate predictor of future economic events.

Is the Kondratyev Wave just another crash theory?

While Kondratyev allowed for long periods of economic correction between periods of prosperity, he was punished severely by Stalin for his position on the cleansing benefits of a Capitalist system. In recent years it has become popular for people that are negative on the U.S. and world economy to pirate Kondratyev's theories and manipulate his words to prove points that have often have little or no validity. There was probably no bigger bear on the western economies than Stalin. While Kondratyev paid the ultimate sacrifice for the conviction of his beliefs, Stalin was discredited and Kondratyev has been validated time and again for his theories of dynamic economics.

This all sounds a bit deterministic?

The concept of cycles in economic theory has fallen out of vogue in the past 35 years or so, but anyone in business knows that sales are never even or consistent. The sales cycle is one of the major considerations in the cost of marketing a product. Different products have a different sales and life cycles. It is this interaction between the participants in a economy that creates cycles in general. Availability of credit and the cost of infrastructure also vary from time to time. Without the availability capital product development is delayed. While it may take 2 weeks to decide to buy a car or a year to build a house, infrastructure or capital cycles are much longer. You do not build a bridge or factory and expect to use it only a year or two.This in no way changes the nature on mans spirit or his free will any more than the use of statistics alters the random action of gas molecules. Cycles simply gives us the ability to measure some of these random economic interactions and make future projections of trends.

A 53 year cycle sounds impractical - I need to know what will happen next year?

The "Long Wave" theory is made up of a number of phases created by the interaction of economic events. Each of these events are progressive and lead to the next predictable event. Since the "Long Wave" is broad covering inflation, interest rates, infrastructure, raw material availability and political systems it can be used to accurately identify the next major economic event. Since it is dislocation that cause the most violent and profitable moves in financial markets, the ability to determine ahead of time when these unexpected events will take place is a big advantage. Simple straight line projections can not accomplish the uncovering of this "hidden knowledge".In addition to the "Long Wave" there are a number of shorter cycles that can used to fine tune timing.