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ECO100Y1 (438)
Jack Carr (32)
Lecture

Kondratieff Cycle Notes

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Department
Economics
Course
ECO100Y1
Professor
Jack Carr
Semester
Fall

Description
Kondratieff Cycle: - Long term business cycle J 50-60 years - Periodic fluctuation in rate of economic activity - Measured by levels of employment, prices, and production - Prosperity, recession, depression, recovery - Upswing vs. downturn (Van Dujin and Mensch) Multiplier-Accelerator Mechanism - Function of change in y (output) - Investment increases multiplier increases spending changes - Accelerator = K J Y ratio o Greater than 1, high K-Y Ratio o Consumption affecting investment - Multiplier o Expenditure; person receiving money spends it, continues o investment spending translates to some degree to increased earnings for some in the economy and also allows for increased government spending o increase I = change in multiplier o backwardforward investment linkage - give rise to cyclical responses to initial shocks - economic output depends on the level of the investment o investment determines the level of aggregate output (multiplier), and is determined by aggregate demand (accelerator) -
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