SFB 303 Discussion Paper No. B - 073

Author: Krelle, W.
Title: Growth, Decay, and Structural Change
Abstract: This paper provides the "philosophical background" of the Bonn-IIASA Research Project. The industrial revolution we are living in is a unique period in human history and will lift mankind to a new, better life. Some nations have lead the way, others will follow with some time lag. Thus income distribution on the world scale will inevitably become more uneven for quite a while. But in historical perspective this will be a transitory phase.
Superimposed to this long term trend are long term Kondratieff type cycles of economic activity. We identify these cycles by using indicators and looking for the principal component. We found that the main driving forces of economic growth (the rate of technical progress and the savings ratio) show sinosodial fluctuations of a time length between 30 and 40 years. We are now shortly behind the trough of a Kondtratieff wave. Since our project is concerned with the economic development in the next 20 years we may assume that the driving forces of economic growth will not decrease as in the last 15 years but increase again though to different degrees. This assumption underlies our forecasts.
Creation-Date: November 1986
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