Skip to main content
Log in

The Long Wave Revisited

  • Original Article
  • Published:
Business Economics Aims and scope Submit manuscript

Abstract

A key question for businesses and investors is whether the low inflation and low long-term interest rates we are now experiencing are a business cycle or a longer-term phenomenon. This paper updates and expands my earlier study on long waves [Synnott 1995]. Using this analytical perspective, I conclude that it is likely that high-grade, long-term bond yields will remain low, especially in real terms, for several years. Low long-term real interest rates for an extended period give the United States a major opportunity for investment and growth, as in previous long-term cycles, provided that appropriate government policies and plans are in place.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2
Figure 3
Figure 4

Similar content being viewed by others

Notes

  1. The purpose of that paper was to look beyond traditional business-cycle analysis—which couldn’t explain why the recovery from the 1990–91. Recession was so sluggish—to see whether the concept of a “long-wave” could be helpful in understanding our economic condition then.

  2. Economists have long been familiar with inventory cycles of 3–4 years duration (Kitchin cycles), capital equipment spending cycles of 7–10 years (Juglar cycles) and a commercial construction and heavy equipment cycle of 10–15 years (Kuznets cycles). What these cycles have in common is a certain regularity, so that once a peak or trough occurs, it is possible to have a rough idea of how the process will develop.

  3. More controversial is the concept of a long cycle of 50 or 60 years duration. As previously noted this cycle is popularly associated with Kondratieff but other scholars have observed it also. As Fischer [1996, pp. 417–418] puts it, “My own judgment is that a fifty-or sixty-year cycle does in fact appear in many social indicators and has been confirmed by various statistical methods including business cycle analysis.”…

References

  • Fawley, Brett W., and Luciana. Juvenal . 2011. “Commodity Price Gains: Speculation vs. Fundamentals,” St. Louis Federal Reserve Bank, The Regional Economist (July).

  • Fellner, William . 1956. Trends and Cycles in Economic Activity. Henry Holt.

    Google Scholar 

  • Fischer, David Hackett . 1996. The Great Wave: Price Revolutions and the Rhythm of History. Oxford University Press.

    Google Scholar 

  • Grantham, Jeremy . 2011. “Resource Limitations 2: Separating the Dangerous from the Merely Serious,” GMO Quarterly Letter (July).

  • Kondratieff, N. 1925. “The Long Wave Cycle,” translated and republished by Richardson & Snyder in 1984.

  • Lowenstein, Roger. 2000. When Genius Failed: The Rise and Fall of Long-Term Capital Management. Random House.

    Google Scholar 

  • Milikowsky, Brina. 2011. “Building America's Future: Falling Apart and Falling Behind,” Transportation Infrastructure Report 2011. Building America's Future Educational Fund.

  • Norris, Floyd. 2011. “Sometimes, Inflation is Not Evil,” Business Day, New York Times (August 11).

  • Schumpeter, Joseph. 1954. The History of Economic Analysis. Oxford University Press.

    Google Scholar 

  • Synnott 3rd, Thomas W. 1995. “The Long Wave in Inflation and Real Interest Rates.” Business Economics, 30 (1): 35–41.

    Google Scholar 

Download references

Authors

Additional information

*Thomas W. Synnott, 3rd is an adjunct professor of industrial engineering at Cooper Union Engineering School. Previously, he was with the USAF Institute of Technology and the U.S. Trust Company, where he is chief economist emeritus. He has published articles in various journals and is a member of a number of scientific and professional societies. He received his B.A. from Williams College and his M.A. and Ph.D. from Yale University.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Synnott, T. The Long Wave Revisited. Bus Econ 47, 119–125 (2012). https://doi.org/10.1057/be.2012.3

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/be.2012.3

Keywords

Navigation