(Roughly) Daily

Posts Tagged ‘cycles

“Speculative bubbles do not end like a short story, novel, or play… In the real world, we never know when the story is over”*…

Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages is a hugely-influential book by Carlota Perez that suggests a connection between technological development and financial bubbles. which can be seen in the emergence of long term technology trends. She explicates her model by tracking repeated surges of technological development over the past three centuries, from the Industrial Revolution to the Information Age.

Written almost 20 years ago, it contained an implicit projection of where we would be today…

For this first stab at determining just when and where we are, we’re looking at 2002’s Technological Revolutions and Financial Capital, by Carlota Perez. One of the great economists of our time, Perez is a leading thinker on technology and socio-economic development. Her book outlines a four-phased financial cycle depicting the archetypical sequence of capital deployment and market traction for a major technological revolution. In this post, we’ll dig into Perez’s cycle and discuss where we sit today in 2021…

Where Are We? Part 1: Bubbles, Bubbles, Toils, and Troubles“: Annika Lewis (@AnnikaSays) and David Phelps (@divine_economy) apply Perez’s principles in an attempt to figure out where we are and what our future might hold– the first in a series of attempts to break down economic theorists to try to figure out where exactly we are in a cycle.

* Robert Schiller

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As we reset our sextants, we might recall that it was on this date in 1927 that the 15 millionth– and final– Model T rolled off of the Ford assembly line… effectively marking the end of the beginning (the “transition phase”) of the cycle that Perez calls the “age of oil, automobiles, and mass production.”

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“The past is not dead. It is not even past.”*…

 

 zoomable version here

In 1943, as American businesses tried to guess whether wartime relief from the Depression would translate into postwar prosperity, the Tension Envelope Corporation printed this chart for customers. The infographic folded into a pamphlet and could be displayed on the wall when opened. (The online archive of the Federal Reserve, FRASER, has digitized a PDF of the pamphlet, which you can view here.)

The infographic and the explanatory text below it tap data from several sources, including U.S. Treasury reports, the Department of Labor’s Bureau of Labor Statistics, the Survey of Current Business, and the Committee for Economic Development, a nonprofit founded in 1942 to help American business plan for the postwar future. Excerpted text from a Committee for Economic Development publication, “Business Planning Now for V Day,” can be found in the lower left-hand corner of the chart.

In an explanatory section on the federal debt—represented on the chart as a red line that climbs steeply upward beginning in 1941—the chart’s authors articulate a strong stance on what could be an alarming indicator: “The necessary cost of this war is not important. Victory is worth the price. Whatever the cost to the future citizens is, they will get their money’s worth in benefits derived.”…

From the redoubtable Rebecca Onion: “A Comprehensive 1943 Infographic of American Booms and Busts.”

* William Faulkner

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As we reach for the Dramamine, we might recall that it was on this date in 1969 that Chemical Bank installed the first ATM in the U.S. at its branch in Rockville Centre, New York.  In fact, as noted here before, the ATM was imagined (and an early version patented) in 1960 by Luther George Simjian; but a six-month trial of the stand-alone device in 1961 was a failure.  A British version (developed by the banknote company Delarue and deployed by Barclays) debuted in 1967, but required the use of pre-acquired “cheques” for withdrawal.  The Chemical ATM was the first of the breed that is now common: networked machines that communicate with the bank (and its account information) in real time.

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Written by (Roughly) Daily

September 2, 2015 at 1:01 am

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