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Skyscraper Curse to hit Europe


It is not a big stretch of the imagination that Europe is facing an economic crisis. Even optimists admit that there is some potential for a crisis to develop. However, my skyscraper model has issued a crisis signal. The signal comes in the form of the Shard, now the tallest building in Europe.

The skyscraper model holds that when there is a new record setting skyscraper it is a sign of a looming economic crisis. The model has successfully identified the Panic of 1907, the Great Depression, the Stagflation of the 1970s, the Tech Bubble, and the Housing Bubble. The only false positive occurred in 1913 when an economic crisis was staved off by the outbreak of war in Europe.

The model also works for state and regional records. A new record-setting skyscraper for a country is a sign of a national crisis. A regional or continental record is a sign of a regional or continental economic crisis. The Shard is being built in London and at a height of more than 1000 feet marks a new record skyscraper for Europe. Measuring new records is difficult to do because there are alternative measures (floors, feet, total height, etc), but it appears the Shard set the record in July or early August.

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

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