Characteristics of The Cycle
Kondratiev identified three phases in the cycle: expansion, stagnation, recession. More common today is the division into four periods with a turning point (collapse) between the first and second phases. Writing in the 1920s, Kondratiev proposed to apply the theory to the 19th century:
- 1790–1849 with a turning point in 1815.
- 1850–1896 with a turning point in 1873.
- Kondratiev supposed that, in 1896, a new cycle had started.
The long cycle supposedly affects all sectors of an economy. Kondratiev focused on prices and interest rates, seeing the ascendant phase as characterized by an increase in prices and low interest rates, while the other phase consists of a decrease in prices and high interest rates. Subsequent analysis concentrated on output.
Read more about this topic: Kondratiev Wave
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