Quarterly Journal of Austrian Economics

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Is There Such a Thing As a Skyscraper Curse?

Tags Austrian Economics OverviewBusiness Cycles

09/09/2016Elizabeth BoyleLucas M. EngelhardtMark Thornton

Quarterly Journal of Austrian Economics 19, no. 2 (Summer 2016)

ABSTRACT: There is an emerging literature on the subject of skyscrapers and business cycles. Lawrence (1999) first noticed the correlation between important changes in the economy and the building of record-breaking skyscrapers. Thornton (2005) established a theoretical link between the two phenomena. Several papers have subsequently examined the impact of skyscraper building on the economy and in particular on the role of psychological factors on the building of record-breaking skyscrapers. Not surprisingly, most people scoff at this notion, and Barr et al. (2015) present extensive empirical evidence that skyscrapers do not cause changes in GDP, but precisely the opposite. Here we show what the skyscraper curse actually is, and show that the entire empirical literature on this subject supports the existence of a skyscraper curse, including most of Barr et al. (2015). In addition, we present new empirical evidence supporting the skyscraper curse.

KEYWORDS: Skyscraper Curse, business cycle, Austrian School

Elizabeth Boyle

Elizabeth Boyle is a former intern with the Mises Institute.

Contact Lucas M. Engelhardt

Lucas M. Engelhardt is an associate professor of Economics at Kent State University's Stark Campus. His work is in macroeconomics, primarily in examining how various assumptions about capital affect business cycle models.

Contact Mark Thornton

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