Economics Questions

Re: Depression every 70-80: Is this a cycle?

kobayashi — Sun, 02 Dec 2012 20:19:38 GMT

Yes, I have.

Why I'm back in Mises looking is with respect to the

Kondratiev Wave Cycle.
I don't put serious thought in Kondratiev theory but there is One important element to it.

In a substantial family 75 years is a close approximation of living aural [family] history.

Today there are few to no living people who were involved or even present to know of and pass on actual details of family [and the society around them]

150 is double that - a family member approaching 75 has a possibility of having actually met an ancestor who was alive in the Civil War

Think of the Civil War at approximately 150 years, and consider how many people today do not have or are not aware of any american ancestors in the middle of the nineteenth century.

Someone who is 75 today knew ancestors who were adults in the twenties, and may have met aging relatives who were alive in the civil war.

Someone who was an adult during the Revolution may have known why their families came over from seventeenth century England or Europe - The English Civil War or the European Thirty Years War.

Re: Depression every 70-80: Is this a cycle?

Kaz — Mon, 10 Jan 2011 22:56:24 GMT

agreed with Kaz here. Except if I recall correctly, the so-called "Long Depression" turned out to be pretty good. Prices were falling but there was economic growth. This was addressed by Tom Woods in one of his presentations(unfortunately, i forgot the title of it), and i think i've seen addresssed somewhere else as well. Does anyone know which presentation it was where Tom Woods talked about this?

I disagree with Woods on this, taking more of an Austrian approach than his Rothbardian approach.

He defends the period more because it starts precisely with the imposition of the gold standard by force, and Rothbardians see this as somehow good. He abandons the Rothbardian obsession with opposing all attempts to measure economic activity objectively, when those metrics can be twisted to support his position, as the Rothbardians tend to do...if we use his unprincipled change in standard, then Rothbard was wrong about the cause of the Great Depression, wherein he refuses to consider the price stability of the 1920s that proves there wasn't an inflationary boom before the bust.

Re: Depression every 70-80: Is this a cycle?

In Restraint of State — Mon, 10 Jan 2011 22:41:38 GMT

agreed with Kaz here. Except if I recall correctly, the so-called "Long Depression" turned out to be pretty good. Prices were falling but there was economic growth. This was addressed by Tom Woods in one of his presentations(unfortunately, i forgot the title of it), and i think i've seen addresssed somewhere else as well. Does anyone know which presentation it was where Tom Woods talked about this?

Re: Depression every 70-80: Is this a cycle?

Kaz — Mon, 10 Jan 2011 21:41:56 GMT

around 1775 is when we first experience hyperinflation (not worth the continental), during the civil, the south also suffered from hyperinflation (greenbacks), in the Great Depression, the country suffered a deflationary crisis, and now (2008+) it looks like we are all heading towards hyperinflation once again. Just seems a bit strange these events occur in relatively a 70-80 period time frame.

You missed the depression Jefferson caused in 1806 or so, because of his embargo, the inflationary period that occurred between the First Bank of the US ending in 1808 and the Second Bank of the US being chartered in 1816, and of course the two depressions that occurred around the dissolution of the Second Bank of the US, thanks to Andrew Jackson. Oh, and the series of panics and depressions caused by the gold and silver rushes causing wild inflation/deflation in our bimetalic system, in the 1840s-1860s, which are what caused conditions to be bad enough to precipitate the "Civil War" in the first place.

And there's zero danger of hyperinflation, today, even aside from the ridiculously hyperbolic attitude that is necessary to expect HYPER inflation from an increase in money supply merely in double digits:

Hyperinflation always entailed the issuing of money that then remained in the economy, snowballing. The Fed's trillions added via its short-term loans and quantitative easing are all temporary money, that is destroyed when its function ends. When the Fed sells back the securities it bought with QE2, for example, it will simply destroy the money it is paid. The overnight, 30, and 90 day loans of the other trillions of dollars are likewise automatically destroyed when they're paid back.

This leaves the only risk as that of having high inflation, probably the low double digits, when the economy finally recovers. When inflation starts registering at all, the Fed will raise rates and sell its securities. Sadly, it takes a year or two for the impact of this to become visible, so we'll probably end up with two years of inflation AFTER it starts to react, then in a backlash recession caused by its belated contraction, just like every other cycle in the 60 year inflationary period from the 1940s through 2006 or so.

Re: Depression every 70-80: Is this a cycle?

Kaz — Mon, 10 Jan 2011 21:31:32 GMT

Has anyone noticed how something major occurs every 70-80 years in the US? The last Great Depression occurred roughly 70-80 years ago, and the Civil war occurred 70-80 years before that. In addition, 70-80 before that we had the american revolution. Has anyone noticed this? Does anyone think this is a cycle, more or less?

I suppose it's a failing of our socialized education system, that people don't realize how common depressions were until the 1950s.

In fact, we had a depression in 1920, a panic in 1916, another one in 1907 that was kept from becoming a depression only by private enterprise setting up a system of Lenders of Last Resort, another in 1900, a depression from 1893-1896, a long period of weak economic growth before that going all the way back to the depression of 1873, so that the entire 23 year period is sometimes known as The Long Depression, et cetera.

http://butnowyouknow.wordpress.com/those-who-fail-to-learn-from-history/history- of-economic-downturns-in-the-us/

Check out the history of economic downturns in the US.

Note, by the way, that all economic downturns have specific and general reasons, individually. There is no "cycle" in the sense that you seem to mean, which smacks of "magic thinking", as if the cycle existed on its own, not as a symptom of natural factors.

Re: Depression every 70-80: Is this a cycle?

Zlatko — Mon, 10 Jan 2011 13:03:47 GMT

Maybe I'm biased but I tend to reject mechanical explanations of complex human phenomena without looking much into the explanations.

Re: Depression every 70-80: Is this a cycle?

mwalsh — Mon, 10 Jan 2011 12:17:27 GMT

Sorry for the lag from my first post to now, I was camping with the Order of the Arrow (Part of the Boy Scouts of America, and was honored w/ the Vigil Honor)

But, this is the book I was talking about: http://www.amazon.com/Millennial-Makeover-MySpace-American-Politics/dp/0813543010/ref=sr_1_10?s=books&ie=UTF8&qid=1294661695&sr=1-10

Doesn't address the economics, but it does look at the political views (to me to much stress is placed on cyclical theory, that it will be repeating ~x many years without fail, but...)

This may help in that it looks and shows of how in the cycles it addresses, the people are unified, and tend to be pro-big gov't.

Re: Depression every 70-80: Is this a cycle?

rosstaylor — Sat, 08 Jan 2011 19:32:02 GMT

Anyone....?

Re: Depression every 70-80: Is this a cycle?

rosstaylor — Sat, 08 Jan 2011 13:55:09 GMT

around 1775 is when we first experience hyperinflation (not worth the continental), during the civil, the south also suffered from hyperinflation (greenbacks), in the Great Depression, the country suffered a deflationary crisis, and now (2008+) it looks like we are all heading towards hyperinflation once again. Just seems a bit strange these events occur in relatively a 70-80 period time frame.

Does anyone also notice that when a currency collapses, usually a dictator (or dictatorship) arise?

Re: Depression every 70-80: Is this a cycle?

BioTube — Sat, 08 Jan 2011 04:11:00 GMT

To compensate for something, you have to be able to predict it. While people might be prepping for individual events, knowledge of these cycles is fairly new and still very obscure.

Re: Depression every 70-80: Is this a cycle?

enndub — Sat, 08 Jan 2011 02:00:34 GMT

If such cycles existed then shouldn't market participants be mitigating their effects through temporal arbitrage?

Re: Depression every 70-80: Is this a cycle?

resist272727 — Fri, 07 Jan 2011 23:03:10 GMT

1775-American Revolution Begins

1861-Civil War Begins (~86 years later)

1929-Great Depression Begins (~68 years later)

2008-Great Recession/Global Economic Collapse Begins (~79 years later)

It's a little wider than 70-80 years. Plus, the American Revolution wasn't really a depression and neither was the Civil War (although it was bad economically.) This mostly seems to cover internal "regeneration" time periods.

Re: Depression every 70-80: Is this a cycle?

rosstaylor — Fri, 07 Jan 2011 21:53:22 GMT

that is an amazing theory. Any other comments?

Re: Depression every 70-80: Is this a cycle?

Esuric — Fri, 07 Jan 2011 07:25:56 GMT

Has anyone noticed how something major occurs every 70-80 years in the US? The last Great Depression occurred roughly 70-80 years ago, and the Civil war occurred 70-80 years before that. In addition, 70-80 before that we had the american revolution. Has anyone noticed this? Does anyone think this is a cycle, more or less?

- Ross

Joseph Schumpeter's trade cycle analysis focuses on what he calls "long waves," where there is a major catastrophe every 5-6 decades or so, and where smaller economic contractions occur periodically between the peak and the trough of the long wave. Hyman Minsky, a post-Keynesian economist, also incorporates Schumpeterian "long waves" in his analysis. Early business cycle theorists also focused on long waves, but they attributed them to solar cycles and other mystical phenomena, as opposed to Schumpeter and Minsky, who attribute them to either real structural changes and the accumulation of private debt respectively. Austrians reject the "long wave" analysis (if anything, they attribute it to interventions which aim at preventing and/or delaying the inevitable correction).

Re: Depression every 70-80: Is this a cycle?

Brian LaSorsa — Thu, 06 Jan 2011 23:55:49 GMT

You may be talking about the Kondratiev wave theory.

Economics Questions

Re: Depression every 70-80: Is this a cycle?

Kondratiev Wave Cycle. I don't put serious thought in Kondratiev theory but there is One important element to it.

Think of the Civil War at approximately 150 years, and consider how many people today do not have or are not aware of any american ancestors in the middle of the nineteenth century.

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Re: Depression every 70-80: Is this a cycle?

Kondratiev Wave Cycle.
I don't put serious thought in Kondratiev theory but there is One important element to it.