A Wavelet Investigation of Periodic Long Swings in the Economy: The Original Data of Kondratieff and Some Important Series of GDP per Capita

Abstract

The existence of fluctuations is part of the narrative, especially when there is a slowdown (or worse, a contraction) in economic activity. The presence of long waves with a period of about 50 years as proposed by Kondratieff is one of the most controversial and fascinating theories about economic cycles. This paper analyses both the original Kondratieff data (from which the hypothesis started) and a dataset that includes GDP per capita for several significant countries. By applying the wavelet analysis (WA), the main objective of the paper is to understand whether it is plausible to support the existence of periodic fluctuations consistent with long cycles theory. The outcomes for Kondratieff’s original dataset do not show the presence of a coherent periodicity for most cases. The same conclusion can be drawn for all the GDP per capita series.

Commodity Prices and the US Business Cycle

“…Ahmed (2022) uses wavelet analysis techniques to examine the time-frequency interdependencies between global equity and commodity markets based on the first four moments of their return distributions, revealing that these interdependencies are both time-dependent and frequency-dependent, with distinct patterns during different time periods, particularly during the 2010-2014 turmoil and after 2015, highlighting practical implications. Focacci (2023) explores the controversial theory of long economic cycles, proposed by Kondratieff, by analysing both the original Kondratieff data and GDP per capita data for various countries using wavelet and Fourier analysis to investigate the existence of periodic fluctuations, ultimately finding limited support for such cycles in both datasets.…”