Re: What the cycles suggest

Mike Alexander wrote:

> How one views long waves will depend what theory is employed to look at 
them. As > Joshua Goldstein points out in his excellent book on the topic, 
there is no paradigm > for the study of longwaves, just various schools of 
thought.

I have a friend, a Russian physicist, who in these days sells these so-called 
"prepayment models" to the mortgage portfolio managers. 

He once said this: 

"Give me any time series data and I will fit them a Fourier Series. It will 
be a perfect fit but it will neither explain nor predict anything." 

More or less, that is. A more "scientific" statement of this is the so-called 
"Lucas critique" of the 1970s by the famous economist Lucas (sp?). I 
sometimes wonder whether we are falling into the trap of "fitting a Fourier 
Series to time series data" or not in this longwaves business. 

A structural model, similar to the one Arrighi attempted in his "Long 
Twentieth Century", based on capital accumulation cycles, seems more 
meaningful me, if we want a model with some explanatory and predictive powers 
to use to steer our way into the future better. 

Not that I believe future is predictable.

Best, 
Sabri Oncu