On Fri, 28 Jun 1996, Salvatore Babones wrote:
> Where I differ with both Goldstein and Frank is on the nature of long
> cycles themselves. I have of course read Goldstein's account -- several
> times. But I think that the consensus opinion on this matter is wrong.
> In my reading long waves are primarily financial phenomena.
Just on a general systems note, it is dangeruous to move from
evidence that long waves are financial phenomena to conclusions that they
are primarily financial phenomena. As the MIT dynamic systems group
argue, in a system with a mix of positive and negative feedbacks, cycles
tend to 'entrain', so that a shorter cycle that is in the neighborhood of
half of a longer cycle will, in interaction with the longer cycle, come
to approximate half of the longer cycle -- both by the longer cycle
modifying chort cycle turning points and by the shorter cycle moidifying
long cycle turning points.
....
> While I agree that there was greater variability in U.S. economic growth
> after 1973, I object that
> 1. It is unknown to what extent post-war U.S. economic growth was
> long-wave driven and to what extent it was driven by other factors.
If the system is 'overdetermined', waiting for the degree to which
the different factors drove changes in US GDP might well involve waiting
forever.
> 2. It has not been established that there exists a long wave in economic
> growth.
I'm curious what the standard for establishing 'a long wave in
economic growth' would be.
> 3. No causal mechanism offered for a long wave in economic growth has
> ever sustained a rigorous hypothesis test.
I'm wondering about the standard here, as well. The most common
explanations for long wave phenomenon in economic growth involve
technological evolution. What other observed aspect of technological
evolution has sustained a rigorous hypothesis test?
Virtually,
Bruce R. McFarling, Newcastle, NSW
ecbm@cc.newcastle.edu.au