Next technology paradigm

[giantdragon]

May be you have heard about Kondratiev wave theory which state that economical cycles are caused by advancements in technology. According to this theory world economy grows (counting in general, because some poor and politically unstable countries may miss cycles) with expansion of new technology and start stagnating when technologies from current cycle become widespread.



There were 5 cycles in the history ATM and many economists think that we currently are at 5th wave recession stage. This cycle (IT and electronics) for inexperienced people may look still advancing, but look around, what we have now...? New iPhone with different visual design each year? More megapixels in camera, cores in CPU, resolution in displays? Of course these improvements are good and don't let sales to collapse entirely (as happens with automobiles right now where almost no advancements happen), but cannot be a driver to recover economy from Great Recession which have no signs to end so far.

What do you think will be the new technology paradigm which will start next economic boom (6th wave)?

[tristan_luther]

Biotechnology and genetic engineering, probably. By the way, I think IT and electronics are still developing in a qualitative way and will continue to do so, if you look beyond the consumer items you mentioned. Bitcoin is an example of this. Artificial intelligence and robotics should also be classified as IT and electronics.

[giantdragon]

By the way, I think IT and electronics are still developing in a qualitative way and will continue to do so, if you look beyond the consumer items you mentioned.

Recession stage of the wave doesn't requires complete advancement halting. Problems in economy start to appear when the speed of development falls under some threshold. Automobiles are good example - there are still some advancements (e.g. hybrid and electric vehicles), but in general auto industry and car sales are falling no matter from it.

Bitcoin is an example of this.

Kondratiev theory state that in the recession stage capital turns into speculative instruments, therefore you may feel bullish on BTC/USD price (at least until 6th wave will not start).

[Mageant]

What do you think will be the new technology paradigm which will start next economic boom (6th wave)?

Free energy/Cold Fusion.

See numerous revolutionary energy technologes being developed here:
http://pesn.com

[bythesea]

If what is he saying is true then there are many many more waves.

Next big, lets say implementation of nano technology into daily life.

[herzmeister]

yup, most Austrian economists kind of deny that there is a technological business cycle, but it's obviously true.

But it's no contradiction to their points, as it is largely a problem of bureaucracy and inflexibility that an economy can not just "scale back" easily with everyone just working a bit less, without it turning into a disastrous "recession".

The next growth phase? Maybe space and under-water colonization.

[lonelyminer (Peter Šurda)]

yup, most Austrian economists kind of deny that there is a technological business cycle, but it's obviously true.

If I may, the Austrian Business Cycle Theory is supposed to address three very specific questions:

• Why is there a sudden general cluster of business errors?
• Why do capital goods industries and asset market prices fluctuate more widely than do the consumer goods industries and consumer prices?
• Why is there a general increase in the quantity of money in the economy during every boom, and why is there generally, though not universally, a fall in the money supply during the depression (or a sharp contraction in the growth of credit in a recession)?

The ABCT does not deny that other types of fluctuations in macroeconomic variables can occur. I don't think that merely a technological cycle would have all of these three symptoms at the same time, but that doesn't mean that there can't be such a cycle from the point of view of macroeconomic aggregates.

[giantdragon]

Free energy/Cold Fusion.

Cold fusion seems to be a fiction and never will be achieved. Hot fusion is possible, but its current development is too far from starting industrial use within next 10-20 years.