GGR221H1 Lecture Notes - Lecture 3: Deindustrialization, Qwerty, Business Cycle
Document Summary
Capitalism is a dynamic and unstable system, with periods of rapid growth followed by periods of. Named after the russian economist n. d. kondratieff who in the 1920s studied long term fluctuations in economic activity. Each wave of economic development approximately 40-60 years. Each wave is characterized by a period of growth or upswing (approximately 25 years), followed by a period of stagnation and decline or downswing (approximately 25 years) Fundamental qualitative transformations rather than mere quantitative fluctuations. Shorter oscillations in the level of business activity superimposed on long waves ends ! According to freeman and perez each wave is associated with: Each new wave created by a bunching or clustering of innovations. Bunching stimulated by leadership of pioneering entrepreneurs searching for ways of resuscitating rates of profit. A process of creative destruction: new technologies and products emerge, rendering existing industries obsolete. As markets become saturated, investment shifts to process technology. Excess capacity and decreasing demand- crisis- technological stalemate .
