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The Kondratiev wave is an economic cycle in free market societies predicted by and named after the Soviet economist Nikolai Kondratiev in the early 20th century. While the Kondratiev wave states that economies go through a cycle of repeating boom and bust periods roughly every 50 years known as super-cycles, the concept is not widely accepted by 21st-century economists. This is despite the fact that Kondratiev effectively predicted the 1929 stock market crash in the US known as Black Thursday based on a similar crash in 1870, and documented several other economic cycles supporting his theory that ranged from the years 1789 to 1926. While the theory holds up in statistical records, it has gained wider adherence in Marxist belief systems than in capitalist ones.
The economic theory of Kondratiev was given widespread attention in the publishing of his book in 1925, The Major Economic Cycles. Refining research from earlier work by Netherlands economists Jacob van Gelderen and Samuel de Wolff in 1913, Kondratiev produced evidence of his super-cycles while employed by the Agricultural Academy and Business Research Institute in Russia until 1928. His theories were criticized by Stalin, however, as they conflicted with Soviet economic policy, and he was sent to the gulag system of forced labor camps from where he was executed in 1938. Western economists discredited the Kondratiev wave during the Cold War by referring to it as "Kremlinomics," a slur towards the ideas being socialist and leftist propaganda. President Barack Obama in the US was labeled as supporting such socialist ideas by his detractors early after he was elected president in 2008.
The Kondratiev cycle ranges from a period of 50 to 60 years in length. Evidence for it also exists in more ancient times, including documentation of economic cycles by the Maya civilization, the ancestors of the nation of Israel, and by Greek and Roman historians. The boom and bust cycle is said to continuously pass through four stages. Inflationary growth is followed by stagflation, where inflation continues but unemployment also increases and consumer demand drops. The third stage is deflation, where both price levels for goods and services as well as the availability of credit decreases. The fourth stage is then depression, where a protracted period of high unemployment and low levels of production and investment ensue.
These periods of the Kondratiev wave pattern have been compared to the four seasons. Inflation is categorized as a period of spring growth and peaceful expansion of commerce and the summer begins a period of stagflation and dropping consumer demand often involving the outbreak of war. The autumn period is characterized as a deflationary period of recovery from war where consumer prices drop, and the fourth period of winter involves renewed war and low levels of civil investment.
In the US secular market, the Kondratiev wave has been documented in at least four historical periods where a remarkable ability to follow the seasonal boom and bust cycle that he predicted followed. The economy went through the cycle from 1784 to 1844, during which both the War of 1812 (1800 to 1816) and the Mexican American War (1835 to 1844) took place. It was repeated during the period of 1845 to 1896 when the American Civil War (1859 to 1864) and the Spanish American War (1875 to 1896) also filled the summer and winter cycle periods of stagflation and depression.
This continued in the US into the 20th century. The period of 1896 to 1949 included the economic effects of World War I (1907 to 1920) and the economic effects of World War II (1929 to 1940). In between each summer and winter cycle, a preceding boom period and reconstruction period took place. The latest documentation for the cycle as of 2011 is the period of 1949 to 2011, with the Vietnam War's economic effects taking place between 1966 to 1982, and the War on Terror from the period of 2000 to 2011 and on.
While the time scale of each period of economic change is somewhat flexible as well as the economic nature of each period itself, the cycle does appear to exist in historical records. The chief argument of economists against the Kondratiev wave is not as to whether or not it exists, but as to what its main causes are. Views range widely for causes in economic fluctuations from the effects of war to the disruptive effects of innovation, or the effects of land speculation. Such widely varying reasons for the Kondratiev wave are why economics is often given the label of being the dismal science.